Would the United States Still be in Debt If It Received All the Money Owing from Other Countries?
The question often arises whether the United States would still be in debt if it received all the money that other countries owe us. On the surface, this idea can seem tempting, but the reality is more complex. According to recent data, the total amount of money that other countries owe the USA is around 7281.3 billion dollars. This figure, while significant, only scratches the surface of the complex financial situation the country finds itself in.What Does the Debt Really Mean?
The current national debt of the United States is approximately 32 trillion dollars. If we were to hypothetically collect all the money owed to us from other countries, the remaining debt would be around 24.7 trillion dollars. However, as discussed below, the concept of national debt is multifaceted and not solely related to loans but rather a broader financial obligation.Conditions and Challenges of Collecting the Debt
It is important to note that most international aid is given away rather than loaned. Furthermore, there are specific conditions attached to the money that is loaned, and these terms can vary greatly from one country to another. Collecting the full amount of money owed would be both logistically challenging and legally complex. Hence, claiming that we could simply “call the debt owed” is overly simplistic and not practical.Economic Concepts and the Role of the National Debt
The public debt, or net liabilities, of the US government is a key concept to understand. It is the net dollars that the government spends into existence, which eventually move from checking accounts at the Fed to savings accounts in the form of US securities. These securities are liabilities of the Treasury, much like bank balances, which are owed back to depositors. Upon maturity, these securities are no longer considered national debt but rather part of the financial assets of the private sector.There is a misunderstanding that the national debt is a crisis anytime numbers are moved between columns on an Excel spreadsheet. The reality is that the debt is a net financial asset for the private sector. This means that grandparents, through their retirement funds, 401k, IRAs, savings accounts, and other financial instruments, are essentially passing on unspent savings to the next generation. It would be difficult to justify confiscating and eliminating all this financial savings for the sake of tweaking data on a spreadsheet.