What Is the United States Net Worth?
“We’re bankrupt, we just print money out of thin air”
“Our National Debt is so big we’ll never pay it off, we are insolvent”
“If I operated my family finances like this we’d be in bankruptcy court”
These are things you hear on Twitter, in certain media outlets, blogs, maybe even from your friend at the club. We have huge debts, owe a ton of money to things like Social Security and Medicare therefore the United States must be in dire financial straits.
Are we though? Is our nation bankrupt? Let’s do a thought experiment: what might the Balance Sheet of the United States look like?
Liabilities: We’ll start with the ugly part, what are our liabilities?
According to the National Debt Clock we owe just north of $28T dollars. Man, that seems like a lot, I owed $525 on my last Amex bill and I couldn’t sleep at night.
We also have unfunded liabilities like Medicare and Social Security. There’s no exact answer for this but let’s say, conservatively, that it’s $200 Trillion (I’m including federal and veteran benefits here).
Let’s also use a catch all category of “other” and say that’s $5T. We owe things to people and places and we’ve guaranteed things and this is my guess for all of that.
Total Liabilities: $233 Trillion.
Assets: What are the assets of the United States? Every balance sheet has both liabilities and asset so what are ours?
The United States Government owns physical and financial assets. Let’s do physical first.
The BEA has calculated that the land we own is worth roughly $1.8T and the natural resources on and offshore at around $125T (water, timber, silver, copper, oil, etc). We also own about $450B in Gold and $1.4B in properties and inventories.
I’m also going to use a “other” category here because I guess we could sell aircraft carriers or planes or military equipment we own. Let’s call that $10T.
Now how about financial?
The US holds close to $1.5T in Federally backed student loans and about $2.2T in cash and other investments (data from US Treasury).
Total so far is about $142.3T, still below what our liabilities are.
Now let’s get into two things that aren’t as concrete but incredibly important to our nation’s balance sheet.
What is the value of all the human capital in our education system? All the students some of which might be the next Steve Jobs or Jeff Bezos who go on to create the next Apple or Amazon. What about all the inventions sure to occur in the future or all the discoveries like mRNA vaccines? This is hard to calculate but for the purposes of my blog I’m going with $100T.
What is the value of the ability to tax the most productive private sector the World has ever known? Our government can not only tax the people in its nation but the companies operating inside of it. What is that worth? This is super, super hard but I’m going with $300T. It’s probably way more but let’s just go with that.
Total Assets: a little over $542 Trillion.
Final US Net Worth: +309 Trillion
Yes, we owe money. Yes, people like to use “debt” to scare you. Yes, my last two assets are hard to value, but I promise you that our nation is not bankrupt.
We are likely one of the wealthiest nations in the history of the World (if not THE) and our economy and its workers are incredibly productive.
Can you tell me how many people you know that have gotten rich betting against the United States of America? I don’t know any.
Our economic might, our rule of law, our innovations, our workers drive the stock market regardless of our level of debt. Don’t lose sight of the long-term prosperity we’ve all benefitted from because it’s going to exist far into the future.