How much in liquid assets (cash) and how much in stocks?
Well, according to the CIA’s factbook page on the US (http://www.cia.gov/cia/publications/factbook/geos/us.html),
The GDP for 2003 was $11 trillion, and the population was 293 million.
Split up evenly, this is gives $37,542.66 per person.
According to Encarta (http://encarta.msn.com/text_761556418___11/Money.html),
the total M1 (currency plus demand deposits) as of 2001 was $1.1 trillion (of which about half is cash), which would be only $3,754 split among everyone in the country.
I was always shaky on M1 vs. M2 vs. M3. Which category do stocks fall in?
Ah, but shouldn’t the debt be subtracted from that figure?
3,754 doesn’t sound right. Isn’t the poverty line considered 8,000?
You got it right Controvert.
The US is quite possibly the most endebted country on the planet.
By what measure is the US the most endebted county?
Assets would include land, buildings, stocks and shares, etc. Your typical billionaire will not have most of his/her assets in M1
Another thing: typically your debt is owned by someone else as an asset, so you might need to work out some way of cancelling the two out.
Since some of the debt is foreign-owned, you’d have to take that into account.
Could one calculate the cumulative net worth and subtract the national debt?
Wait a sec… GDP measures economic activity, not wealth. Our national wealth is certainly more than $11 trillion. IANAE, but I’m pretty sure that, for example, the GDP measure would only count the stocks that were traded or produced dividends in a given year; it would not calculate the value of the stocks that people hold and allow to appreciate.
One can hardly talk of redistribution of wealth solely as a percentage of economic activity. But I don’t know how to find how much wealth there is in the US, so I’m afraid all I can do is be a critic.
AFAIK, none. Stocks are an instrument representing ownership, not currency.
M1 - currency in circulation and demand deposits (AKA cold hard cash and deposits)
M2 - M1 plus accounts such as savings accounts and small time deposits. Money market mutual fund shares
M3 - larger time deposits like short-term Treasury bills and commercial paper
Actually I don’t think that is right.
GDP is defined as the total value of all goods and services produced within that territory during a specified period (most commonly, per year). (http://en.wikipedia.org/wiki/Gross_domestic_product#Definition). This would be analogous to a nations REVENUE.
Debt and assets like cash or stock are balance sheet items. You would not subtract debt from GDP.
Also ‘GDP also does not tell us the actual distribution of the wealth of a country. Certain groups of people within a country might not be benefiting from its economic wealth. A high GDP could be the result of a case of a few very wealthy people contributing to the economy, while most of its citizens live at or below the subsistence level.’
A good source for answering wealth questions is the Federal Reserve Triennial Survey of Consumer Finances. According to the Fed, as of 2001 mean net worth per American family was $395,500. For a per capita figure, you would have to divide by average family size, which I believe is about three.
Of the assets which make up this net worth, 42% are financial (stocks, bonds, bank accounts, cash) and 58% are real (land, houses, cars, and small business equity). Debts total about 12% of assets and the two are netted together to arrive at the above net worth figure.
Needless to say, much of this wealth would disappear if you attempted to redistribute it. A small business is often worthless outside of the hands of its owner and founder, for example, and ranchland in Wyoming isn’t of much value to anyone except an experienced rancher.
M1 includes currency, demand deposits, traveler’s checks, and all other checkable deposits – i.e. only money that is ordinarily used for spending.
M2 includes M1 plus savings and time deposits, overnight repurchase agreements, and personal balances in money market accounts – i.e. money that is ordinarily used for spending and money that can be easily converted to M1.
M3 includes M2 plus any large time deposits and money market balances held by institutions. I wouldn’t include M3 as a measure of individual wealth.
From here: http://www.mpowercafe.com/glossary/glossary_M.html
In addition to this, you want to take into account stocks, bonds, futures, art, collectibles, and real estate. There’s a lot more than money.
gazpacho, the U.S. external national debt is over $800 billion; that’s just government debt. The total national debt (again, just our government) is heading for $8 trillion. America’s household debt was $1.7 trillion in 2003, and can only be growing.
These numbers in isolation do not answer my question. A useful number is debt divided by GDP. Another useful number is per capita debt. Then we need comparisons to other countries. I see articles every few weeks about the problems France and Germany are having funding their governmental activities specifically their pension debts so I am curious as to what the statement that the US is the most indebted country means.
Well, looking at the figures Freddy the Pig gave vs. the M1 figures from Encarta, I’d interpret it to mean that cash actually makes up a very small portion of our national wealth.
As for the total value of all stocks, nyse.com says that the total capitalization of the US domestic listed companies is $35.7 trillion.
The CIA World Factbook has this data, along with the a ranking of every country.
http://www.cia.gov/cia/publications/factbook/rankorder/2186rank.html
The US, with a public debt of 62.4% of GDP comes in at #39, compared with Japan at #3 with 154%. France, Germany and the UK are at #32(68.8%), #36(64.2%) and #59(51%), respectively.
There are more unredeemed frequent flier miles in circulation than all the US dollar bills. So long as we are divvying things up, I want my cut of those, too.
gazpacho, you asked “by what measure is the U.S. the most indebted country?” The answer is “in dollars.” If you insist on changing the numbers to ratios related to the large U.S. economy or population, then it’s no longer the answer to the question, now is it?
The enormous dollar amount of U.S. debt IS significant, as it relates to the ability of the world economy to soak it up.
That doesn’t sound right ans is not correct according to the table in your link. U.S., domestically listted companies are about $12 trillion on the NYSE, another 3 or so on the NSADAQ. $1 trillion or so is the U.S. portion of global companies which have a global market cap of $7 trillion.
In other words:
US companies Foreign companies
- NYSE $12 trillion $1 trillion
- NASDAQ <- $ 3 trillion combined->
- foreign markets ? probably very low $19 trillion or so
all in all, $35 trillion
DORFL
Redistribution of wealth really means taking from the most wealthy and giving it to the less wealthy. To do this you would need a high income tax, but even that wouldn’t work, because it never has. The U.S. had a very high income tax (as high as 90%), but I remember there was a millionaire that lived down the street from us at the time and we were better off than the average family around. There are rich people in Sweden and the Netherlands. There were even rich people in Communist Russia , whose wealth was measured in privileges rather than a balance sheet. If it was possible to redistribute all the wealth, by say everyone throwing into the pot and having it handed back out, it would be necessary to do it the next year and the next and so on.
True, but without the trade imbalance where would the markets come from for their products? And what does this have to do with the subject? If I’ve got $10,000; you’ve got $2,000; doper X has $6,000; doper Y has $1000; doper Z has $12,000 while dopers A, B, C, D and E are broke, we each get $3,000. That will in no manner improve the national debt.
I would also like to ask anyone that can answer a simplistic question. The government owes a lot of money (I don’t deny that and at times it bothers me), but the government does not use a real balance sheet that includes all of its assets. During Reagan’s administration they talked about selling some to pay off the debt. So how about the fact that the largest (by far) land owner is the U.S. government. How about selling our fleet and air force to China? Isn’t it too bad that we no longer can get the Japanese to buy the Capital Bldg. and the White House? Just think of the possibilities of selling the Grand Canyon, Yellowstone or Yosemite to Richard Branson. And why not offer to sell Alaska back to the Russians? So when we say the government is in debt, isn’t it like saying I 'm in debt because I owe $2000 to my credit card? Which tells you little about my finances.
I personally think everyone would get a very angry Bill Gates knocking on their door
