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To: tacticalogic
"debt held by Americans" is in bonds, are they counting the value of those in "net worth"...   ...counting it as an asset but ignoring the liability of having to pay it back.

Right now Americans have $97T in assets (which includes $7T in federal debt) along with $14T in liabilities --that's what gives us the the $83T in net worth we're talking about.  If Americans are taxed $7T to pay the debt, then American private bank accounts drop by $7T and the money buys back the bonds and goes into U.S. private bank accounts.  Bank accounts don't change but the bond holdings change by dropping $7T.   So if we pay off the national debt then Americans get poorer, but the government gets richer because it no longer has the $7T liability.

So for Americans to get richer we need a bigger national debt.  I think I'm missing something here... 

39 posted on 03/13/2015 3:08:55 PM PDT by expat_panama
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To: expat_panama
So for Americans to get richer we need a bigger national debt. I think I'm missing something here...

That seems to be how it works out if you count the individual's federal bond holdings as a asset, but don't count the taxes that will have to be levied to pay them back as a liability. You get an artificially inflated picture of private net worth.

40 posted on 03/13/2015 3:28:08 PM PDT by tacticalogic
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