Listening to George Gammon’s interview of Mike Maloney today, it occurred to me that the obvious claim that the federal government is insolvent with $27 trillion in debt and only ~$3 trillion in assets — this isn’t entirely true the way it’s implied.
The numbers are correct, but if the government was really that insolvent, we’d see drastically different events unfold as a rational reaction to that in the global marketplace. What we’re missing is that there’s an unspecified asset on the federal balance sheet that’s far greater in value than its current debt, and that is what allows drunk insolvent uncle sam to keep racking up debt.
What could that asset comprise? I contend that two large components are (a) the compliance of the American people and (b) the (perhaps crony) control of the institutions. Here, compliance includes things like belief in the currency (dollar) and conforming transactions and taxes denominated in it. Monetarily valuing this asset is hard to do, but it’s probably many multiples of the US GDP.
If we want the insolvency of the government to manifest itself, for we believe that to be the truth that must be revealed and realized for a better and transparent future, then we will have to gnaw away at the valuation of that asset. Opt out of the system, even if just partially — one easy way is to be self sufficient in as many ways as possible.