No kidding? In fact, we have done this analysis once before using Bill Gross's (PIMCO) numbers that puts US total debt closer to $100 trillion once all contingencies, guarantees and other unfunded future liabilities are thrown into the pot. And that's present valuing related assets using today's long-term treasury rates. What happens when they double?
So what would it take to pay off the US debt - you would think that one trillion barrels in world -wide oil reserves would do it? Under strict assumptions it does, but then how do you run the future economy? To be fair, this assumes too, that all US debt is owed to foreigners. It isn't. The vast majority is owed to other citizens that Keynesian economists believe we should not fret about under the theory - it is just money you owe to yourself. That could be a hard one to explain to pensioners if one day that debt is cancelled for whatever reasons.
Still. we are on-side with Mr Rogers, as it is going to take a lot more than shale oil to pay the debt and keep the "physical economy" running for a few more decades. Think about it!
First Financial Insights