How to bleed a country dry

How to bleed a country dry

America's touting of the capitalist model is an interesting position given their gargantuan debt level.

You could be forgiven for thinking the US government is the richest in the World. In fact, nothing is further from the truth.

We all hear about the US debt level ($39T at time of writing), we also hear about the debt to GDP ratio (approx 120%), but what we don't hear is what the total US assets are.

Why not? If the USA were a company, we'd want to know how many dollars in total assets balance that enormous mounting debt.

Total US assets are quite staggering. Valued conservatively at around US$140 trillion, they are way, way higher than the debt the Government carries.

So what does a 40-odd trillion dollar debt matter, right?

And here's where the story takes a weird turn.

The US government doesn't own all of the total assets. In fact it's closer to the truth to say the US government doesn't own any of those assets.

Government liabilities (debt) exceeds total government assets, thus it has a negative balance sheet. Yup, that's correct.

But what about $140 trillion in assets?

Here's the kicker... All of those assets are held in the private sector. All of them.

The US Government holds all of the debt, but virtually none of the assets.

The small amount of assets the US Government owns is offset by the vast amount of debt, resulting in a net negative position of around $37 trillion.

Truth is, the money is all transferred to the private sector, but none of the debt.

It's not that difficult to believe when you hear of a billionaire like Elon Musk, who, according to the Washington Post has received federal funding for his businesses to the tune of $38 billion.

Where does money like this come from? Like the costly wars, it's simply added to the debt by selling more Government bonds.

Ditto for the nearly half a trillion dollars in bailouts following the 2008 Global Financial Crisis.

Don't forget the $150 billion dollars per year going "straight to the coffers of big insurance cartels" as Senator Marshall put it.

Not to mention the $22 billion per week in interest payments on the debt, or put another way - one trillion per year.

All of this money and more, is transferred to the private sector. All of it. However, this transfer is becoming less and less equitable.

Billionaire wealth and the divide between rich & poor are both growing more rapidly than ever before.

More than 30% of all US wealth is now owned by 1%. That wealth equates to $55 trillion. More than the wealth of the "bottom" 90%.

In the good old days of capitalism, the flow of money would go up the pyramid, and come back down. At some point, the flow of money stopped coming back down.

Companies shed staff in order to stay profitable for the shareholders, regardless of the impact on the workers. And... as we herald in the age of AI, the jobs have become even fewer.

Meanwhile, profits of the big companies are better than ever, particularly if they have US Government contracts.

The capitalist system in America seems to have transitioned to a structure of corporate welfare.

These guys are bleeding the country dry and emburdening generations of tax payers with ever more impossible debt. Meanwhile, the cash and assets generated by this debt are being squirreled away by those that will never pay for it.