Skip to comments.The Fed Balance Sheet: What Is Uncle Sam's Largest Asset?
Posted on 06/09/2012 7:17:02 AM PDT by blam
The Fed Balance Sheet: What Is Uncle Sam's Largest Asset?
By Doug Short June 8, 2012
(Note from dshort: I've updated the quiz based on yesterday's (Thursdays) Q1 Flow of Funds release. Hint: The correct answer is the same, just more incredible.)
Pop Quiz! Without recourse to your text, your notes or a Google search, what line item is the largest asset on Uncle Sam's balance sheet?
A) U.S. Official Reserve Assets
B) Total Mortgages
C) Taxes Receivable
D) Student Loans
The correct answer, as of the latest Flow of Funds report for Q1 2012, is ... Student Loans.
The rapid growth in student debt has been a frequent topic in the financial press. One stunning chart that caught my attention illustrated the rapid growth in federal loans to students since the onset of the great recession. Here is a chart based on data from the Flow of Funds Table L.105, which shows the Federal Government's assets and liabilities.
As I point out on the chart, the two callouts are for Q4 2007, the quarter in which the Great Recession began (December 2007) the most recent quarter on record, Q1 2012. The loan balance has risen and astonishing 332% over that timeframe, most of which dates from after the recession.
This chart only includes federal loans to students. Private loans make up an even larger amount. Earlier this year the Consumer Financial Protection Bureau (CFPB) posted an article with the attention-grabbing title: Too Big to Fail: Student debt hits a trillion. The details of the private student loan market are not readily available, but CFPB plans to publish its study results on the topic this summer.
But back to our quiz. Student loans may be a liability on the consumer balance sheet, but they constitute an asset for Uncle Sam. Just how big? Nearly 35% of the total federal assets, over four times the 8.6% percent for the total mortgages outstanding.
Of course, assets are, sadly, the trivial side of Uncle Sam's Flow of Funds balance sheet -- about 1.36 Trillion. The liability side totaled 12.65 Trillion at the end of Q1 (details here).
Student loan debt is something we'll want to continue watching, especially when more details of the private loan market becomes available.
And Who is Uncle Sam’s Largest A$$? That’s a toss-up.
Michelle has this one down.
China ought be willing to loan us more money to expand the student loan program. After all, creating a few million more American liberal arts graduates will get them closer to achieving their geopolitical goals than any amount of military spending they could engage in as an alternative. :)
This is all money that has been funneled to the university elites through student fees.
The only asset this country has is the taxpayers. All other are liberal liabilities.
Funny that the balance sheet doesn’t include property, plant and equipment. In which case it’s meaningless. The fedgov owns 30% of the total landmass of the US. That’s 650,000,000 acres, and is mostly in the west. 45% of CA for example is owned by the feds, 85% of NV, etc. IOW, my simple strategy is that the feds sell land to pay off the national debt. That and massive cuts which get fed spending below 10% of gdp. What that means is the end of socialism security and other so-called entitlements (all they are is unconstitutional [and in many cases immoral] wealth transfers in any event).
Maybe the Chinese can just pay back the $1.4 trillion they owe us from WW2.
Michelle doesn’t go down.
The Fed Balance Sheet: What Is Uncle Sam's Largest Asset?Just from the Headline my first thought was of something not in any of the 'Asset' charts, to wit: Land and Mineral Values
With all the land that the US Gubmint 'owns' (stolen from the states) and all the minerals on or in them: from Copper, Silver, and Gold, to Oil, and even the Lumber on the land -- I'd think that would be the biggest 'asset'. It just isn't in cash.
3. assets,Now just because the Gubmint doesn't use those assets doesn't change the definition of them or make them worthless and not an 'asset'.
a. items of ownership convertible into cash; total resources of a person or business, as cash, notes and accounts receivable, securities, inventories, goodwill, fixtures, machinery, or real estate.
b. Accounting . the items detailed on a balance sheet, especially in relation to liabilities and capital.
c. all property available for the payment of debts, especially of a bankrupt or insolvent firm or person.
d. Law . property in the hands of an heir, executor, or administrator, that is sufficient to pay the debts or legacies of a deceased person.
Student Loans are how Socialists enslave people.
Put stupid students in debt and then promise removal of the debt if they vote for Obama.
The largest asset the U.S. has is its selfless men and women serving daily in the Armed Forces that protect our freedom. Despite the liberals attempts to sell it off to the highest bidder.
Am I the only one who believes that title of public lands in the federal territories should have passed to the states, when they became states?
Boy, she literally is a “WIDE LOAD”.
Uncle Sam’s largest asset is the American people.
Agreed. It would be good to see a financial analysis of the federal government, including all property owned, using generally accepted accounting principles. Let’s see the balance sheet side of things, and see what the actual value of assets minus liabilities really is.
Why does the federal government own 85% of Nevada? How did that come about? Especially in a time of trillions in debt, shouldn’t we look at selling off assets?
What about the land they have stolen from the people? Government should no own land.
Interesting question. At this point it’s moot, and what is needed is to engineer a means to actually pay off our national debt and then ensure we never get in this situation again.
No wonder Obama wants everyone in college.
No one should get student loans.
As long as we remain slaves, yes the American people are a large asset of the fedgov. More is the pity.
Carla Bruni is the middle, who is the left one?
If the fedgov were a publicly traded company the SEC would have shut them down for non-disclosure and or material misstatements of fact.
Biggest asset used to be its work ethic. Per capita, it’s been steadily dwindling.
The major tangible asset that WE THE PEOPLE own is all the federal land locked up by varous special interest legislation.
Trillions of dollars in loans and handouts that will never be paid back may be considered as assets by government accountants but realistically that is money gone forever and should be written off.
Must be time to upgrade to a bigger monitor.
Most of that money will go back to the Democrats in Congress as campaign donations, hence more loans hence more money, etc.
LOL. Sorry about that.
I would have thought that Federal Lands would be the largest asset - or don’t they count that ?
None of the above. It’s the State of Alaska.
Purportedly a fauxto -- butt when you're constantly held up as some sort of fashion maven, you're "wide" open for critique....
Land. Exactly. And states should be demanding to get their land back from the feds, so they can put it to productive use.
I would think the amount of land the feds own would be the largest asset. Every year millions of acres are taken over or “preserved as open space”. What do the feds plan to do with all that land?
[ What Is Uncle Sam’s Largest Asset? ]
When the Federal or State givernments can Tax something you OWN..
You’re paying RENT ON IT!... you don’t own it at all..
The proper question is do you own anything?..
-OR- do you merely appear to own something?..
Property taxes are a bit obscene.. and humorous..
And income taxes are a cartoon...
Americans have been quite brain washed..
Yes.. thats right I’m talking to YOU!!!..
Her or her 100 person multi million dollar staff sure screwed the pooch on that one.
I are going to Europe. All the most important people in the world will be there and they will be dressed to kill, so I will dress like I am going to company picnic.
(ahem) I wonder why they take only the centers?
LOL. I guess they want to be moderates, i.e., non-partisan.
The large area locked up in federal parks, reserves and wildernesses counted as federal assets.
Bring back slavery and sell all Federal employees — legislative, executive, judicial — to Alaska for $!. Round them up and ship them to the ANWR where they can do something they’ve never done before; work for a living building their survival community. Once these people are located to the ANWR, they can never leave.
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