Liabilities 89 Trillion, Debt only 7. ?? Can you reconcile these?

[oscar111]

On the fed reserve L5 table, with which i am sure you are all familiar, living with it , eating and sleeping with it tucked under one arm......

It lists on line nineteen, a "liabilities" total of 89 trillion.

Yet we oft speak of the Fed Debt as a mere tuppence... a negligible 7 trillion.

Can you expound upon the 89 trillion figure?


If you mislaid your L5 table, here it is :


http://www.federalreserve.gov/releases/z1/current/accessible/l5.htm

PS EXTRA POINTS;

wealth of the world?

[oscar111]

1. KIK

KIK

[Warpy]

2. Probably counted against the "assets" represented by the GDP

but kick, also. I'd like to know the answer to that one, myself.

[oscar111]

3. No, GDP is yearly income sort of thing. Wealth is very different

Wealth is more like the bank savings we have.

At least as far as i can figure it.

Warpy, you agree?

I think GDP doesnt ever show up in this kind of table.

[AJH032]

4. You could be right

GDP is exactly as its name implies, the gross domestic product, kind of like our country's "revenue" in the most general sense of the word (distinguished from our general treasury's revenue). The number for debt could simply be whatever liabilities are above GDP, or the government's revenue. I'm just guessing though.

[oscar111]

5. Hi AJ... well, i was not looking at as you said, but your point IS interes

interesting. Pretty complicated when one thinks about it.

Anyone able to parse out what the table L5 is talking about with "liabilities"?

BTW, dont miss the intriguing total wealth at the bottom line, right column. Titanic number.

[Inland]

6. Federal bookkeeping doesn't count all liabilities in the debt.

The debt is bonds, which we assume are going to be paid. But debts that any business would have to report somewhere as liabilities, such as the social security pension debt, isn't really included. I suppose the theory is that a government promise like SSI isn't really a debt, since the government can always renege.

[oscar111]

7. So, you are saying the liabilities is stuff like ss?

Anyone else second that?

[papau]

8. Sort of - no business reports asset/liability in-balances but Snow likes

to scare folks with wild numbers that are WAGS (wild ass guesses).

Pretend you know how each transfer payment group will grow in payout under current law over the next "infinity" of years.

Then pretend you know how Gov revenue will not only grow, but also how any of that revenue will be dedicated to a transfer payment group and how that dedicated revenue will grow - again over a real long time period - as in they actually use "infinity".

The discount the two dollar streams back to current date using a discount rate. Then take the discounted value of the tax flow and call that "assets" and subtract from that the discounted dollar flow of the transfer payments (over infinity) and call that liabilities and send out a press release saying we have a entry in the Fed Reserve L5 table that claims a a "liabilities" total of 89 trillion.

NO NOT TELL THE READER THAT THIS BULLSHIT. DO NOT TELL THE READER THAT A SLIGHT INCREASE IN THE DISCOUNT RATE MAKES A MASSIVE DIFFERENCE (this year the 2006 SS report LOWERED the discount rate from 3% to 2.9% so as to make the numbers for the present value of the imbalance larger).

And for goodness sake do not tell anyone about the MASSIVE POSITIVE effect of a SLIGHT increase in the tax on the RICH on those numbers.

[oscar111]

9. kik

kik

[oscar111]

10. kik

kik

[oscar111]

11. kik

kik