eli5: Why is the US commonly called the “wealthiest country” if we have 30T in debt?


eli5: Why is the US commonly called the “wealthiest country” if we have 30T in debt?

In: 5

That’s referring to the people in the country, not to the government of the country. Actually, probably the people and/or the corporations of the country.

Looking at [https://en.wikipedia.org/wiki/List_of_countries_by_wealth_per_adult](https://en.wikipedia.org/wiki/List_of_countries_by_wealth_per_adult) the US is second to Switzerland in *mean* wealth per adult and 26th in *median* wealth.

There’s probably a bit of American exceptionalism mixed in, too.

Debt is not a bad thing if you are paying it off. The USA does indeed pay off their debt and in time, all the time. They may owe $30 Trillion, but they pay off about $300 billion per year.

It’s the same with a person buying a house. You can be a wealthy person with a high paying job, but still have hundreds of thousands to pay off on a mortgage. That’s not terrible because you making the money to pay off that house.

Individual wealth, government debt.

Also, wealthy can have debt… is a lawyer with a $1m mortgage on his McMansion wealthy or not?

This usually refers to GDP or Gross Domestic Product. This is how much “stuff” and “services” the country produces in a year. Another way to think of it is as the amount of money that gets exchanged within the economy.

The US has a GDP of about $20 trillion in 2020, and has had the highest GDP for some time now.

I’ll make this one a bit longer since auto moderator is kind of rubbish and only seems to care about sentences.

A good chunk of the debt is owned by other Americans. So while it’s debt on the government books, it’s an asset on someone else’s ledger.

Further, government debt is not like debt that you or I might incur. They have both powers and responsibilities that an ordinary citizen never would. This is not to argue that government debt is fine and unlimited borrowing should not cause any worry. But that’s a whole other discussion.

Finally, if one adds up the value of everything in the USA, land, parks, cities, it dwarfs the debt figure. So it’s kind of like worrying about a home equity loan of a few thousand bucks when the house is worth millions. Yes, it could cause problems, but it’s not run for the hills trouble.