Total Assets of the U.S. Economy $188 Trillion, 13.4xGDP

Total Assets of the U.S. Economy $188 Trillion, 13.4xGDP

I recently wrote about the fact that the forces impacting the U.S. economy’s balance sheet, at about $200 trillion, dominate those affecting GDP (just over $14 trillion) when thinking about interest rates and stock prices. A blog reader wrote to ask me where the $200 trillion figure comes from.

First, I want to point out that it is revealing that we have to ask the question. Why is it that people know so much about something so small (GDP) but so little about something so big (total assets)? I think it is because since the 1930’s macroeconomics has developed into a discipline concerned almost exclusively with who is spending how much money. Very little attention is paid to the capital base, or balance sheet, that makes it possible to produce the goods and services measured as GDP. A glance at a newspaper or any list of data produced by the government will convince you this is the case.

The best source of asset market, or balance sheet, information we have today is the document Z1: Flow of Funds of the United States produced after the end of each quarter by the army of economists working at the Federal Reserve Board.

The most recent (116 page!) flow of funds document, publish March 12, contains information about the balance sheet of the U.S. Economy on 12/31/08. I will warn you that you will have to dig for it–most of the 116 pages are devoted to measuring “flows of funds”, roughly the amount added and subtracted from balance sheets during the quarter. But you can find most of what you need if you hunt for it.

Total Assets by Sector Q4 2009

Total Assets by Sector Q4 2009

So what about the $200 trillion? I have constructed the table, above, by pulling figures from the report. The report reports balance sheets for some sectors of the economy but not others (which I find a little strange). They report balance sheets for 1) Households and Nonprofit Organizations, 2) Nonfarm Corporate Business (big companies), and 3) Nonfarm Noncorporate Business (small companies). These balance sheets show that at the end of 2008 housseholds and nonprofits owned $40,814 billion in financial assets like stocks and bonds and $24,905 billion in tangible assets like houses and cars, which adds up to $65,719 billion in total assets. Against that total, households and nonprofits owed debts, or liabilities, of $14,242 billion, which means they had net worth of $51,477. (These last numbers are in the document on p. 102 but not in the chart.)

Adding the three sectors together (Subtotal in row 4) produces a balance sheet with $104,049 in total assets divided between $58,639 in financial assets, and $46,301 in tangible assets.

Now it gets trickier. The Fed does not report complete balance sheets for the other sectors (farms, financial sectors, federal government, state & local governments, or rest of world (foreign owners). Instead, they report statements of financial assets, financial assets and financial liabilities. In other words, they leave out the fact that all these other sectors own tangible stuff like land, buildings, cars and computers, in addition to securities. I think that is a big mistake, reflecting the analytical bias in the macroeconomics community that somehow people consciously manage their portfolios of stocks and bonds but are passive owners of more than $46 trillion of real stuff.

We can use the Fed’s measures of financial assets held by all the sectors to get a pretty good figure for total financial assets in the balance sheet. Adding in farms, financials, governments and foreign owners brings the total financial asset figure up to $141,512 billion, which is reported on p. 115. (I say a pretty good figure because the document reports a $4,922 billion statistical discrepancy in getting to that figure themselves.) They do not report figures for tangible assets held by those “other” sectors, which is unfortunate because the “other” sectors are actually bigger than the ones they report.


That leaves us in an awkward position in trying to derive a total asset figure than makes sense for the overall U.S. economy’s balance sheet. One way to do it is to add up the numbers that we do know. I have done so in line 13. We know there are $141,512 billion in financial assets. We know that just three of those sectors own $46,301 billion in tangible assets. Adding those two numbers together produces a (reported) total asset number of $187,813 billion, pretty close to the $200 trillion number I wrote about at the top of the story. (The number would have been much closer 2 years ago before the recent drop in asset values.) Unfortunately, I have no idea what to call this number because it leaves out so many huge question marks.

If I weren’t so lazy I could dig up numbers to at least approximate the values of some of the question marks in the table. Farms own land and tractors, banks own buildings and ATM machines, governments own all sorts of crap including nearly a billion acres of land and all those cars you see on the highway that don’t have to buy license plates like you and me. And foreigners own a ton of stuff too. For today’s purposes all we have to know is that these things would add up to a very big number. And plugging these figures into the missing cells in the table would produce a total assets number far in excess of $200 trillion.

OK, that’s enough arithmetic. Why does this matter? It is to show you that the balance sheets are so big that almost any analysis of the economy that focuses on spending or saving or budget deficits alone, to the exclusion of the balance sheet, is almost certain to be wrong because balance sheet changes are so big. For example, household financial asset holdings fell from $50.5 trillion in Q3/07 to $40.8 trillion on 12/31/08 due to the collapse of stock and bond prices. And the value of their tangible assets fell by another $3.5 trillion due to falling home prices. Does anyone really think that the impact of this roughly $13 trillion drop in household net worth can be fixed by sending people checks for $700?

The most relevant application of this thinking today is how to understand the impact of the massive bailout programs on the economy and to say something meaningful about the impact of government borrowing on interest rates and stock prices. I will write more on these questions later.

You can read an analysis of budget deficits and interest rates using this approach in Chapter 4 of my new book, Lessons from a Road Warrior. You can get it from Amazon or get a signed copy directly from the John’s Book section of our website.


John Rutledge


  1. Martin Screeton

    December 3, 2012

    Awesome article and the total debt of the US does not really look so bad now. In fact its very small compared to our assets!

  2. Howard Jacobson

    December 18, 2012

    As a CMC Economics Graduate and friend of Dr. Rutledge over 35 years, my comment revolves around a more esoteric concept. The "I" word in the economy. Incentive is the driving force behind wealth creation. Take it away or stifle it with extreme taxation, and the plant will wither and die. Increase it and the economy gains steam like a well-fertilized plant yielding a large bounty for harvest.

    It doesn't really matter what the actual "number" of true assets in the USA is. What really matters is the direction of the economy. Do people have an increase in the work ethic or a decrease? Is the risk taking of productive "players" in the economy on the boom or the wane? That will spell the ultimate answer to the real question of what is the future wealth prospects for our great country.

    We are not liquidating the USA....I hope. But we might be turning off the spigot of Incentive.



  3. paul smith

    March 16, 2013

    in terms of tangible assets (physical) cars computers phones are crap maybe for today but not for the long run ( I m all set with an 88 Toyota camry) gold and silver have been #1 for 5000 years ( beat that track record fiat currency) (100% failure rate) gold is wealth cash is debt. problary has a little to do with the fact that it cant be created its fungible and its a noble metal that will never corrode erode or disappear.
    if our country and the fiat system really worked how normal borrowing really works ( or if we played our cards the right way) it should of looked like this.....

    like any startup company we (U.S.) borrow the money- build, invest, trade (create capital) , pay off debt from profits get in the green (+$) repeat and prosper....just like any real functioning hard working company.



    no winners in the dollar game only losers exchange your cash for real assets

    some day soon a penny will be worth more than a $100 dollar bill just because of that little bit of copper will be worth more than that piece of paper already written on.

  4. VG

    May 20, 2013

    Some say that US infrastructure worth around 8 trillion. So the valuation of assets by government is kind of understated. Then there is a military...Numbers seems a bit silly...

  5. atari2u

    September 16, 2013

    Do you have an idea of what the "value" of the Credit Default Swap Paper is world wide, I have heard estimates of 700 trillion, what portion of that is held in US corporations?

  6. John Rutledge

    September 16, 2013

    That's a very good question. I don't know the answer but will dig around and see if I can come back with something.

    By the way on a related matter, I just re-calculated the market value of total assets held in the US as of June 2013 and the number is $234 trillion, not counting the value of land and natural resources held by governments (the Federal government owns more than 700 million acres), corporations, or foreign persons. Pretty big number!

  7. Robert G

    October 16, 2013

    I've always found the discussion of America's 'balance sheet' fascinating, and agree that our current budgetary reporting and practices are so minimalist as to be near useless. Instead of boring you with my own gyrations on our net worth, I'd simply like to add a few comments ...

    On the matter of the 'financial weapons of mass destruction' I typically use a 'bookie' analogy. Even if the ultimate worth of the FWoMD is 1 or 2 percent of the aggregate (and I suspect and fear it would be less than that) the tangible value to our financial institutions is in the vigorish. You gotta pay the vig going in, and you are going to pay the vig to get out. Fee-for-service, baby! It keeps our banks and investment houses lubricated but cannot be readily shown on an estimate of net worth.

    In regard to the matter of unfunded liabilities, the annual report of the SSA shows in excruciating detail what potential cash-flow issues will arise. With all due respect to our concerned friends, this is not an economic issue. It is an issue of political will, and fear and propaganda (WHOA! $90 trillion!) only exacerbates the problem.

    Over the 75-year term of our unfunded liabilities, the cumulative GDP of the United States of America, at 2-2.5% annual growth, will likely exceed $4,000 trillion (whoaaaaa!). A combination of raising the eligbility age, means-testing and a bit of revenue, and the 'issues' are gone.

    And, if you review, the SSA annual reports from over the last five years, you will find that these unfunded liabilities over the next 75 years have dropped 20% in total as a result of the ACA, or ObamaCare, and that Medicare solvency has been extended 9 years or so into the middle of the next decade. Political will!

    What you will also find in the SSA reports is that it is not really a 75 year problem ... it's a 15 to 20 year 'bubble' of Boomers that must be worked through the system. We get to the other side of the Boomer Bubble and it's smooth sailing.

    As a final comment for the day, I'm not sure from whom the idea of a 'net worth tax' to retire govt debt originally came, but I know I first heard of it in the 1990s ...

    From Donald Trump, of all people.

  8. Paul Maher

    December 24, 2013

    I am not much of an economist, but I figure that there must be a formula that would allow you to calculate an acceptable debt load based on your income and your other assets. I have been most interested in the total amount of money spent on all forms of energy used by our country across all sectors of our society. I have arrived at just over 3 Trillion dollars annually. These numbers came from the Energy Information Agency. EIA, As the author of this conversation has pointed out, it is some times very difficult to come up with good numbers because of the obfuscatory approach they have adopted. I actually believe that is closer to 4 Trillion dollars annually. 95+ Quads per year.

    I am an advocate for several mew energy technologies. I believe that if we are smart we can cut that number down to well below 1 Trillion within 5 years. Below are the new technologies that can make that happen

    Hello Friend, I'll get right to it. It took me a while to realize that if there was a particular group of folks that needed to be brought up to date on what is going on in the world of "condensed matter physics", it is those folks called "ENERGY CONSULTANTS" I advocate for several new energy production paradigms. There are at least 9 new technologies on the rise that have the oil companies very nervous. There are lots of patents, and there are several Open Source devices as well. Here's a list with a brief description of each of 9 of them. Dennis Bushnell of NASA's Langley Research Center has said that "it is a broad spectrum phenomenon", and Oh Boy, is it ever!!
    1. Cold Fusion, also known as Low Energy Nuclear Reactions, Lattice Assisted Nuclear Reactions, Controlled Electron Capture Reaction. These technologies are all about forcing Hydrogen or Deuterium atoms into the crystal lattice of a metal such as Nickel. Once the crystal lattice of the metal nanopowder has been sufficently saturated with Hydrogen excess heat is generated. This is not hard to see, as everything is still vibrating, but now all the atoms are in much closer proximity than before. The quanta mechanical explanations are not 100 % understood, but there are several companies and government offices that have operational devices. Good bye oil. Google LENR, NASA, Zawodny, and Bushnell. NASA loves it.
    2. Dense Plasma Focus goes something like this. Two cylindrical electrodes are enclosed in a glass tube. One is slipped inside the other. The tube is then filled with Boron gas and high voltage is applied to the electrodes. A plasma is then produced and pulsed by a strong magnetic field. As this pulsing is increased and focused the plasmoids begin to ball up on one another. As pulsing continues a beam of electrons emanates from one end of the tube and a beam of protons from the other, with extremely high amounts of energy being produced. Google Charles Chase, Skunk Works, and Dense Plasma Focus
    3. Catalyzed Hydrogen is what will replace Electrolysis. Molybdenum Sulfide is but one of the substances that will trim the Hydrogen right off the water molecule with no energy being expended, releasing it to power a fuel cell and generate electricity directly.
    4. Graphene is essentially one atom thick layers of Carbon alternated between layers of insulation, such as mylar. When you get a bunch of these layers stacked up and attach an electroes to the top and bottom of the stack you have created a capacitor of another color. Extremely high values of capacitance can be arrived at. 3000 farads is what I have seen advertised. This material can be used as a capacitor, a spectacular new form of battery, or configured as an extremely efficient solar cell.
    5. Zero Point Energy/Energy of the Vacuum used to be a little far out for me, but now I think I've got a cursory handle on it. The process on a Quantum level is much like the process that produces Ball Lightening when tectonic plates shift causing an earth quake and occasionallly something called Ball Lightening. Only in Zero Point it is what happens when an Orthorhombic plane from another dimension intersects our dimension and causes a disruption, releasing energy. Google Moray B. King
    6. Acoustic Cavitation/Bubble Fusion. I am not sure at all how to say anything about this, but there is a great deal published about the possibility of deriving energy using this phenomenon.
    7. Muon catalyzed Fusion another flavor of Cold Fusion.
    When you take into account the amount of money that is spent in just our country annually, approximately $3.04 Trillion dollars. That is 95 Quads at an equivalent of 8 Billion gallons of gas per Quad, it is easy to see how much resistance the oil companies and the Nuclear power folks might muster.
    9. Thermionic Power Generation, I heard about this just the other day. It may be that this technology will be a prime player. The devices turn heat from the sun, or anything else directly into electricity, instead of using light as photovoltaic solar cells do.

    Much of this may be new to you. I understand that, but please consider these things.

    Paul D. Maher

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