The cumulative deficit is obtained by summing all yearly govt deficits (= negative net_worths) after correcting for inflation using the GDP inflation factors published by Bureau of Economic Analysis. This cumulative sum is on the order of ten times the yearly deficit. For 2011 the deficit is 8746.2 billion and the cumulative deficit is 87120.5 billion in 2005 dollars. And the cumulated external account is $31788.4 in billion in 2005 dollars. The excel sheet S.7.a. Federal Govt says that many things are not counted in this sheet. The net worth of the govt sector is the entry FL312090095 in sheet A007 Ann. The net worth external is FL262090095 and is given in A009 Ann, S. 9 a. Rest of the world which is the external account.
Note. The Federal government accounts exclude Federal employee retirement funds (1) Government-sponsored enterprises (GSEs) consist of Federal Home Loan Banks, Fannie Mae, Freddie Mac, Federal Agricultural Mortgage Corporation, Farm Credit System, the Financing Corporation, and the Resolution Funding Corporation, and they included the Student Loan Marketing Association until it was fully privatized in the fourth quarter of 2004. (2) The statistical discrepancy is the difference between net lending or net borrowing derived in the capital account and the same concept derived in the financial account. The discrepancy reflects differences in source data, timing of recorded flows, and other statistical differences between the capital and financial accounts.(3) Excludes land and non-produced non-financial assets and IMF International Monetary Fund.
The GDP inflation factor is 100% at year 2005 and decreases to 23% in 1969. Because I am using data from 1960 to 2011, I am setting this factor to 20% from 1960 to 1968. This can be corrected later. The yearly adjusted numbers are given by
(100/factor )* FL312090095 etc., in 2005 dollars.
The cumulative values are obtained by the running total of yearly values. Net worth household is already cumulative. The govt net worth and external are summed as indicated.
Peoples’ wealth is defined as the net worth of household and nonprofit sectors of the economy (FL152090005 in sheet A003). In the USA, the figure regularly reported by the Federal Reserve of the US is household net worth, and includes corporations as they are essentially owned by American households.(?) from http://en.wikipedia.org/wiki/National_wealth
This includes foreign deposits, ownership of corporate and foreign bonds, real estate, financial assets, and mortgages.
a) Federal Deficits – Net Imports = Net Private Savings, is strictly true. See fig4 of http://pragcap.com/understanding-modern-monetary-syste
If this equation is summed over all years, we get
b) Cumulative Federal Deficits – Cumulative Net Imports = Cumulative Private Savings, or,
c) Cumulative govt “debt” = national wealth.
The last equation is my definition of govt debt which is the left hand side of b). This definition accounts for the foreign sector also.
I did this plot again using the latest data and will either replace or add to the one in my web site. I adjusted the initial govt at 1960 by adding 9000 to (–govt net worth – net worth ext)
This is now close to a line with slope 1 passing through zero except for the wild fluctuations in recent yesrs due to bank failures and wars.