In 2008, the United Nations estimated America's total wealth, including human capital, at around $118 trillion. Dr. John Rutledge, economist and former Bush administration tax policy advisor, estimated the U.S. economy's total assets at $188 trillion. The World Bank tallied America's national wealth as of Q4 2011 at $57.4 trillion. Filmmaker and outspoken activist Michael Moore found that the total net worth of the Forbes 400 in 2009 was $1.27 trillion, while the bottom 60% of households held only $1.22 trillion of $53.15 trillion in calculated national wealth for 2009.
According to a study by G. William Domhoff of the University of California at Santa Cruz, 35.4 percent of all privately held wealth in the U.S. is in the hands of only 1 percent of the nation. The mean household financial wealth of that 1 percent was $15,171,600 in 2010.
The U.S. currently has $16 trillion of national debt. The nation's current GDP stands at nearly $15 trillion.
Why the numbers? Because whenever people hear that the U.S. is deep in debt, its $16 trillion of debt obligations are always juxtaposed with its current GDP. It's a nice parlor trick that makes the folks with thousands of dollars in credit card debt see U.S. debt in the same light as their own debt, thereby making them more sympathetic to neo-conservative prescriptions of fiscal austerity. Put that together with instances of wasteful spending and the appearance thereof in a number of government sectors and you have a ready-made argument for taking a chainsaw to programs perceived as wasteful and unnecessary.
However, there's a big difference between national debt and personal debt. Personal debt is personal debt to the average American, unless they're absolutely adroit at precariously juggling credit cards and loans for profit. Unlike most nations, they don't have the power to print currency, backed by their own full faith and credit, in hopes of satisfying debt obligations if need be. Nations use debt instruments to finance their growth, make investments in trusted, secure currencies and even rely on their own reputation and others' hope of long-term gain in exchange for overlooking short-term debt.
When the average American defaults on their debt, they're usually subject to devastating reductions in their personal credit score (which has an ever-growing importance on financial well-being, these days) in addition to wage garnishments and asset liquidation, unless they manage to get from under their debt via bankruptcy. Even then, it's usually a seven-year wait in the fiscal wilderness as they're practically barred from anything other than lending instruments offering usurious borrowing rates.
Things are a bit different for a nation facing a sovereign default:
Defaulting on sovereign debt can be more complicated than defaults on corporate debt because domestic assets cannot be seized to pay back funds. Rather, the terms of the debt will renegotiated, often leaving the lender in an unfavorable situation, if not an entire loss. The impact of the default can thus be significantly more far-reaching, both in terms of its impact on international markets and of its effect on the country's population. A government in default can easily become a government in chaos, which can be disastrous for other types of investment in the issuing country.
It's unlikely that the U.S. is so hard-up for money that it'll go the road of, say...Greece or perhaps Spain. Uncle Sam doesn't have to worry about harassing debt collection phone calls the same way the average American does.
On the other hand, Jerome Hudson, God bless him, is one of those folks who's firmly in the column of people who thinks Uncle Sam has good reason to keep his phone off the hook:
This is obviously a manufactured mantra. There are over sixteen trillion reasons why America is broke. We are a debtor nation. We blow through roughly seven million dollar every minute and about four hundred million dollars every hour. Heck, even the homeless person you pass on the street is in better financial shape than the country is because at least that guy is flat broke and doesn't owe a trillion dollars to the Bank of China.
A few weeks ago, Zimbabwe only had $212 to its name after paying all of its bills, so you'd presume they are in better shape than the U.S., right?
Come to think of it, the Bank of China would be hard-pressed to liquidate America's assets in the event of a default. Unlike someone who missed one too many car payments or skipped out on the Rent-to-Own bills, you just can't send in the repo man. Well, you could, but the consequences could be nasty. Threads-grade nasty.
Nevertheless, conservative leaders are hell-bent on perpetuating Hudson's narrative in hopes of convincing ordinary Americans to dispense with "expensive" social and financial safety nets and accept the prescribed privations of fiscal austerity as the new normal. The narrative sounds good to Americans who see their taxpayer dollars being spent on the wrong people and the wrong things. The push for fiscal austerity, in combination with the GOP's creative sabotage and obstruction of certain social programs, has left America's infrastructural, educational and social systems rotting on the vine.
In the meantime, the proceeds saved from that shared sacrifice aren't directed to things Americans actually need and appreciate - repaired roads and highway infrastructure, education funding, healthcare access, etc. Instead, the proceeds are funneled towards satisfying financial instruments that were largely the cause of America's current recession and obeying the constant demands of global business leaders for more tax breaks and greater monetary incentives.
It's no coincidence that the net worth of wealthy Americans has risen throughout the recession period. There's a quiet, yet noticeable transfer of wealth going on, where ordinary Americans are expected to hollow themselves out and willingly resign themselves to a lower quality of life, only to see what little wealth absorbed by parasitic financial instruments and gifted to a select few "captains of industry." This is deemed proper and fitting and besides, you should have worked harder if you don't like seeing CEOs enjoy filet mignon while you figure out the best way to make the most of your Spam and ramen noodle dinner.
America only has a spending problem in the eyes of conservatives and the investor/rentier class. In their view, America is spending its money on the wrong things (social programs, infrastructure, minimum wage, access to healthcare, a financial safety net in old age, etc.) and not enough money on the correct things (defense, tax breaks, financial rewards for the investor/rentier/industry captain class). The narrative will continue long after Americans accept a complete lack of healthcare, poverty in old age and little to no opportunity for socioeconomic mobility as their new reality.
We only consider the country in debt because we are constantly being told it is, which will make the upcoming sequestration in March a sight to behold. At this rate, we'll keep carving ourselves up until there's nothing left to carve up, all because the conservatives and the investor/rentier class demand it of us.
