USA GDP: 14.7 trillion
USA Cumulative Deficit: 14.3 Trillion
Percentage of GDP usurped (taxed) by Government at all levels: 27%
US Government corporation equivalent revenue = 3.86 Trillion (.27 * GDP)
The median valuation multiplier of the S& P 500 index is 1.74 X revenue
Implied valuation for the Unites States based on large cap corporate entity equivalence = 6.72 Trillion (tax receipts * 1.74)
Median S&P 500 debt to equity ratio: .49
US equivalent debt to equity ratio: 2.19
The equivalent debt to equity rank of the United States compared to the 500 largest publically traded companies: 463 / 500 or in the bottom 7th percentile of large cap public companies.
In publically traded entities we assume generally that the equity is a function of discounted cash flows or earnings. Of course, our government, in whole does not make money which only serves to exasperate my point.
Furthermore; let’s compare the United State to the notorious PIGS many of which are undergoing severe austerity measures: The follow compares the debt per GDP of U.S. and the PIGS:
United States: 97%
What’s my point? For most of the reasons why one would own U.S government debt, there are likely better alternatives. Second, let’s strike the notion of risk free assets from our collective vernacular.