America’s Wealth Hinges on Its Ability to Borrow Big – or Else
September 1st, 2019Ponzi schemes.
Via: Bloomberg:
The U.S. economy is consistently ranked among the world’s strongest. But cut off its addiction to debt and exhaust its gold and currency reserves, and a very different picture would emerge.
The nation’s health as measured by gross domestic product per capita would plunge into negative territory without its dependence on borrowed money, according to data compiled by Bloomberg.
In fact, the U.S. would fall almost to the bottom of a ranking of 114 economies by GDP per capita. Only Italy, Greece and Japan would fare worse. That’s a seismic shift from America’s comfortable No. 5 spot on a list based on conventional measures.
To get this somewhat dystopian measure, Bloomberg took each economy’s 2020 GDP as projected by the International Monetary Fund as a starting point. We then adjusted the number by removing the ability to borrow, while adding reserves to create an alternative wealth measure.
U.S. per capita income of $66,900 would be slashed to a negative $4,857 using this measure. That’s a total loss of almost $72,000 for every man, woman and child.
The U.S. isn’t alone, though; it’s pretty grim across the board. Among the 114 economies included in the final list, 102 would experience reduced per capita wealth if they suddenly lost the ability to borrow.
Japan ranked dead last, with more than $93,000 of income erased per person. Its per-capita income of $43,701 in 2020 would flip to a negative $50,000 and its rank on the list would plunge 96 spots, from 18th to last.
