ON Thursday; Fed estimated & announced America's Net Worth

[Carl_William]

Article in today's Los Angeles, CA Times (Mar 12, 2005) regarding Net Worth of US household & nonprofit groups indicates:

the net worth of U.S. households rose to a record $48.5 trillion in the fourth quarter, so the Federal Reserve mentioned on Thursday. (how Fed techniques for coming up with this datum is probably a good estimate -- I hope)


"The Fed said total assets owned by households were worth $59.2 trillion at the end of the fourth quarter. Subtracting total debt of $10.7 trillion left the net worth figure of $48.5 trillion."
The Fed counts nonprofit organizations' assets and liabilities with household sector data.

Recent gross value of residential real estate was $17.2 trillion minus mortgage debt of $7.5 trillion equals Americans' homes were worth a net $9.7 trillion.

My questions are (could any of you perhaps add a few pertinent facts to the best of your ability to enlighten me some. Your opinions would be appreciated:

Concerning the total debt of $10.7 trillion, does this debt include the United States' foreign debt? Or is this foreign in a different category? My opinion: I think the foreign is included in this total debt of $10.7 trillion.



My other question is a fantasy hypothetical what-if question -- it is:



Assume every American Household and non-profit group coughed-up its equal share to pay off the total debt of $10.7 trillion. This would be about twenty percent of every household's and non-profit group's net worth. Of course this would never happen, but assuming it did happen - then what would happen. Some things might be:



(1) The Fed will call all notes, bills and bonds -- pay off everybody.



(2) Foreigners would end up with a lot of cash. What would they do with all of this cash if they couldn't buy US treasuries. They could buy up a lot of US real estate and US securities (pump up the markets).



(3) Also, assume certain rich guys have about 20% of their net worth in US treasuries which is exactly equal to their contribution to wipe out the debt. What this would amount to is a permanent moratorium on their treasuries. They would just be out their treasuries.





Any comments would be appreciated.... Thank you

[felson]

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the net worth of U.S. households rose to a record $48.5 trillion

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So Bill Gates is worth a little less than .1% of America. Not too shabby!

[BradleyT]

That seems high to me.

$59T / 300M = $196,666 for every single person in the U.S.

[deathtoau]

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Net Worth of US household & nonprofit groups

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total debt of $10.7 trillion & mortgage debt of $7.5 trillion

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The $10.7 trillion does not include debt held by the government, only personal debt. Of the personal debt, $7.5 trillion is in real estate and $3.2 trillion is in other liabilities such as car payments, credit cards, etc.

To see the real national debt go to national debt or go to debt clock to see how much every citizen owes right now.