Here is an infographic of how massive the US national debt is:
Yes, I know. It’s quite terrible and horrifying and so on.
Only, it really isn’t.
Whenever people talk about the debt, they tend to compare it to the tax base of the US – and then engage in all kinds of bewailing hand-wringing like ‘you see how the American taxpayer will never pay it back?’ Because the US Revenue service only collects about $3 trillion in tax revenues each year – so $19.5 trillion of debt – yikes.
But this is silly. If I buy a R2 million house on a mortgage, and I only earn R500,000 a year, would you be getting all angsty about my ability to pay off my mortgage because the total amount of my mortgage is so much higher than my annual income?
Probably not. After all, we don’t really expect the mortgage to be less than my annual income. Especially as it’s backed by the house itself.
And speaking of houses, let me mention just one part of the US Federal Assets: “Oil and Gas resources worth some $128 trillion“, give or take some trillions (those are oil and gas reserves on state-owned land). That said, those values are based on 2013 oil prices. Based on my back-of-the-napkin calculations, at today’s oil price, the value of those resources is probably closer to $52 trillion. But even so, that’s still more than double the national debt.
Here’s a quote:
Federal real property totals over 900,000 assets with a combined area of over 3 billion square feet and more than 41 million acres of land. Additionally, the federal government owns over 600 million acres of lands and minerals onshore, and owns or manages a total of approximately 755 million acres of onshore subsurface mineral estate. Offshore, the federal government owns some 1.76 billion acres of lands and mineral estate, extending out 200 nautical miles from our shores. The federal government’s total mineral estate holdings are therefore about 2.515 billion acres of lands. Thus, the federal government’s mineral estate land holdings surpass the total surface land area of the nation of Canada.
In addition to the land, there are also:
- All the student-loan portfolios (don’t forget that the State is the creditor for these)
- Government Gold
- All those buildings
And that’s only for starters.
So should we really be that panicked?
I guess we can worry about trends. But that’s about it…