[OPE] US national wealth 2007

From: Jurriaan Bendien <adsl675281@tiscali.nl>
Date: Sat Dec 06 2008 - 15:09:53 EST

>From table 13.5 in the Analytical perspectives annex to the US federal budget, http://www.whitehouse.gov/omb/budget/fy2009/apers.html we can get an idea of total US capital stocks by category, in rounded trillions of 2007 dollars. We can add US-owned assets abroad from BEA data e.g. http://www.bea.gov/newsreleases/international/intinv/2008/pdf/intinv07.pdf and financial assets from McKinsey http://www.mckinsey.com/mgi/publications/Mapping_global/executive_summary.asp to obtain the following kind of table for 1980 and 2007:

                                                                                            1980 2007

Publicly owned US physical assets: 5.2 9.7
Privately owned US physical residential assets 7.5 17.4
Privately owned, non-residential US physical plant & equipment 7.6 14.8
US Physical inventories 1.6` 2.0
US Land 6.4 16.9
Net claims by foreigners to US assets -0.4 8.3
Total US assets owned abroad (BEA) 2 17.6
Total US-owned financial assets (McKinsey) circa 5 (est) 56.1 (McKinsey 2006 figure; the 2007 figure would be near 60 trillion).
    of which government financial assets (excl. Fed Reserve 0.5 0.6
GDP ($trillion) 10 13.6
US Employed Labor force (millions) 99 144
US Population (millions) 228 301

Marxists will talk about the "expanded reproduction of capital" with deep and meaningful profundity, but this is an approximate quantitative indication of the empirical expanded reproduction of capital. And it is a capital structure in which non-productive physical capital is larger in value that productive physical capital, and in which total physical capital assets and total financial assets are nowadays similar in size. The budget document also provides figures for human capital (the value of labor power) and for R&D capital, but I did not include them in this table.
When there's talk of "trillions of debt", you have to evaluate that against these asset holdings. Let's suppose you owe 10 trillion dollars of debt. You obviously don't owe all the different debts over the same terms, but let's say you have to pay all of it back over fifteen years as grand average. Then you have to pay back 666 billion per year, plus interest. But in fact you don't just have debts, but also income, so you are not simply losing capital but also gaining it. By the time you do the calculation properly, you realise that the debt is not such a big problem, and that in fact you can make money from the debt insofar as the capital you owe you can make use of. That's precisely why the debts grew so large in the first place.

However, if expectations of future earnings decline, then you get cashflow problems and you're going to have to cut down on something, cut down costs. Somebody has to pay for the shortfall. Who is going to pay? You guessed it, the workers. The US unemployment rate rose from 6.5% to 6.7% in one month. The EU27 unemployment rate rose from 7% to 7.1% in one month. Japan's unemployment rate is now rising from 4% to 4.1%. That means a cap on real wage growth, though in the short term, because of price deflation, you don't notice it so much.


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Received on Sat Dec 6 15:11:54 2008

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