There was a very scary sounding report on CNBC over the weekend that said the US government is “$16 trillion in the hole” The balance sheet the article used was overly simplistic and extremely misleading. The asset side of the balance sheet showed just $2.7 trillion in assets. Which is accurate, if you exclude almost all of the assets the federal government actually owns.
I am just going to point out a few of the US government’s assets that prove this point terribly misleading. For starters, the IER estimates that total fossil fuel resources owned by the Federal government are valued at over $150 trillion alone. These assets alone are FIFTY FIVE times the amount stated in the CNBC report. But that only scratches the surface. Further, we know the Federal Government owns about 28% of all land in the USA and that the total land value is about $23T so the land alone is close to $7T in value. There’s also the other natural resources. And there’s the trillions of dollars in its own liabilities that it owns via the Fed and Social Security funds. And the ability to tax the most productive private sector in the world.
And none of this even touches on the operational realities behind the United States monetary system and the fact that we’re not going bankrupt unless we choose to go bankrupt. So don’t fret. The United States is not in the hole. Not even remotely close. And we’re not going to be unable to pay the bills on debt denominated in a currency we can print, unless we choose not to pay those bills.
NB – I should add that the “unfunded liabilities” don’t change the story. Even if you include the $30 trillion in unfunded liabilities the assets the US government owns still give it a massively positive net worth.