Amid the crash in GDP, or income, John Rutledge reminds us about the also falling but still massive balance sheet, or assets, of the U.S.
Why is it that people know so much about something so small (GDP) but so little about something so big (total assets)? I think it is because since the 1930’s macroeconomics has developed into a discipline concerned almost exclusively with who is spending how much money. Very little attention is paid to the capital base, or balance sheet, that makes it possible to produce the goods and services measured as GDP.
