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Started By
Message
re: U.S. debt to asset ratio is better than 1:7
Posted on 12/5/14 at 9:43 am to lsu13lsu
Posted on 12/5/14 at 9:43 am to lsu13lsu
quote:
Your house is worth what you can sell it for. Not what you value it at.
So a private company can't calculate its debt-to-asset ratio without first selling off all its assets to convert them to cash, right?
quote:
Bring $128T worth of any mineral to the market and see what you can sell it for.
So you think a person has to actually sell their assets to secure loans with them?
I thought you were smart.
This post was edited on 12/5/14 at 9:44 am
1
Posted on 12/5/14 at 9:46 am to lsu13lsu
quote:
Bring $128T worth of any mineral to the market and see what you can sell it for. Look what happened when all this oil started flooding the market.
An endogeneity argument!
That said, I must admit that although the $128tril is almost certainly a significant overestimate of actual value of all this stuff, it's still going to be in the multiple-tens of trillions. Not that it's an excuse to ignore our fiscal problems, but worth keeping in mind
Posted on 12/5/14 at 9:47 am to SpidermanTUba
quote:
Don't be silly. You can't hate inanimate objects.
yes you can.
but the president doesn't hate oil, gas or coal.
Posted on 12/5/14 at 9:47 am to KCT
quote:
Well hell, tuba boy, let's just sell $36T of those mineral assets IMMEDIATELY and go from $18T in the hole to $18T in the black! BRILLIANT!!!
Why?
Wonder what I'd get for my house if I told my realtor it must be sold tomorrow, period, at any price. Should I use that price when calculating my net worth?
quote:
Tuba, this thread reminds of that scene in "Dumb and Dumber" where Jeff Daniels' character trades the van for a scooter. Jim Carrey's character says something like, "Just when I thought you couldn't get any dumber, you go and do something like this....AND TOTALLY REDEEM YOURSELF!"
What's really sad for you is, that was just a fictional movie, and they were just pretending to be that stupid.
You, on the other hand........
You do realize - you're the one who is suggesting we flood the market with 36 T worth of fossil fuels instantly - not me - right? The quoted text at the top of the page is your words.
Do you sometimes have trouble remembering whether it was you or the other person that said something? There's places you can live where folks will help you with that, you know.
This post was edited on 12/5/14 at 9:48 am
Posted on 12/5/14 at 9:48 am to SpidermanTUba
quote:
We have 128 T in mineral assets.
The national debt is 18 T.
Neither of those numbers makes running a high deficit with no budget responsible behavior.
Posted on 12/5/14 at 9:49 am to SpidermanTUba
quote:
So a private company can't calculate its debt-to-asset ratio without first selling off all its assets to convert them to cash, right?
Have you ever even looked at a fair-market value calculation for private company assets? They generally include discount rates for items (i.e. marketability). Your calculation does not.
Posted on 12/5/14 at 9:50 am to 90proofprofessional
quote:
That said, I must admit that although the $128tril is almost certainly a significant overestimate of actual value of all this stuff, it's still going to be in the multiple-tens of trillions.
That's the problem with government assets. They have so much of them its hard to value. Like our gold reserves. If you compute them based on market value of gold (rather than whatever the number is they use for accounting purposes) - at one point in the recent past you'd wind up with like 20% of all reserve notes backed by gold!
Posted on 12/5/14 at 9:51 am to SpidermanTUba
Taxes = revenue in the business world. The government has been operating at a loss for longer than I have been alive. By any measure found in the business world this would be considered an utter failure.
Posted on 12/5/14 at 9:51 am to SpidermanTUba
I was being facetious, you dumbass.
Glad to see you're on board with Sarah Palin's "Drill here, drill now" campaign, though. Who would've figured that?
Glad to see you're on board with Sarah Palin's "Drill here, drill now" campaign, though. Who would've figured that?
Posted on 12/5/14 at 9:53 am to SpidermanTUba
quote:
That's the problem with government assets. They have so much of them its hard to value.
That's not the only problem; these assets are all such that the typical way of valuating things consistently tends to lead to an overvaluation, so it's best to be very, very conservative with this total estimate
Still, multiple tens of trillions
This post was edited on 12/5/14 at 9:56 am
Posted on 12/5/14 at 9:55 am to lsu13lsu
quote:
Have you ever even looked at a fair-market value calculation for private company assets? They generally include discount rates for items (i.e. marketability). Your calculation does not.
It isn't "my calculation"
The Institute for Energy Research made the calculation. They're a right wing free market think tank. I'm pretty sure they've heard of discounts for lack of marketability.
This post was edited on 12/5/14 at 9:57 am
Posted on 12/5/14 at 9:56 am to SpidermanTUba
quote:
The Institute for Energy Research made the calculation. They're a right wing free market think tank. I'm pretty sure they've heard of discounts for marketability.
That type of advocacy group has a clear incentive to err on the high side on such a valuation
Posted on 12/5/14 at 9:59 am to 90proofprofessional
quote:
That type of advocacy group has a clear incentive to err on the high side on such a valuation
Wouldn't the perception that there is a butt ton of oil and gas under federal lands lower prices?
That's smaller than the gains they get from saying "Hey, let us drill, there's a ton of the shite!" I guess?
Posted on 12/5/14 at 10:02 am to SpidermanTUba
quote:
Wouldn't the perception that there is a butt ton of oil and gas under federal lands lower prices?
Yeah, but the price they could sell it for might still be higher than the cost to bring to market, and therefore profitable.
They might currently not be extracting it for some other reason, like a regulatory one.
ETA: might have misunderstood the question. Alternate answer: yes, and it is easy to "overlook" this effect in a valuation. And doing so is poor methods, but easy to get away with
This post was edited on 12/5/14 at 10:10 am
Posted on 12/5/14 at 10:08 am to SpidermanTUba
quote:If you're planning to sell it to cover debts, you better.
So I should count my home as an asset worth $0.00 because it is illiquid,
quote:
I don't recall mentioning the liquidity of the assets until another poster brought it up.
This post was edited on 12/5/14 at 10:11 am
Posted on 12/5/14 at 10:13 am to PacLSU
quote:Clearly. ANd to be fair since all of the mineral assets would be long-term, rather than current, it would only be fair to add in the NPV of our future liabilities rather than our current liabilities of $18T. Taking that into account... that $128T doesn't look so "big" anymore.
Neither of those numbers makes running a high deficit with no budget responsible behavior.
This post was edited on 12/5/14 at 10:16 am
Posted on 12/5/14 at 10:16 am to Taxing Authority
quote:
NPV of our future liabilities
That's where my mind went- SS and Medicare
Posted on 12/5/14 at 10:55 am to SpidermanTUba
quote:A better corollary to your OP would be if you owned all property and the materials required to build a $300,000 house so you said, "look, I have $300,000 in assets".
Wonder what I'd get for my house if I told my realtor it must be sold tomorrow, period, at any price. Should I use that price when calculating my net worth?
Um, no. You need to build the SOB first which will incur a cost.
Posted on 12/5/14 at 10:58 am to southernelite
quote:
also, what happens when we are self-reliant on alternative energy and those minerals aren't worth shite?
Boom?
Posted on 12/5/14 at 11:28 am to ShortyRob
quote:
A better corollary to your OP would be if you owned all property and the materials required to build a $300,000 house so you said, "look, I have $300,000 in assets".
Um, no. You need to build the SOB first which will incur a cost.
Very good point
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