Strip Out the Paper Claims and the World Is Worth About $600 Trillion
After subtracting $1.11 quadrillion in offsetting financial claims, what remains is about $600 trillion in land, buildings, and equipment.
Economics Explained · Why Is the World In So Much DebtAdd up every asset on Earth and you get a number so large it sounds like a mistake: more than $1.7 quadrillion. That total comes from three big buckets, financial claims held by banks and other financial companies, financial claims held by households, governments, and regular businesses, and real assets like land, buildings, machinery, and infrastructure.
The catch is that almost two thirds of that total is not real stuff at all. It is paper promises between people. The world's financial liabilities add up to $1.11 quadrillion, and because the world only lends to itself, every one of those liabilities is also someone else's asset.
Take the simplest example, money in a bank account. To you, the deposit is an asset you own. To the bank, that same deposit is a liability, money it owes back to you. A loan works the same way in reverse. Your mortgage is your debt, but to the bank that issued it, it is an asset that pays interest.
That is why financial claims net to zero for the planet as a whole. The figure most people mean by world debt is narrower, about $322 trillion in traditional borrowed money as of 2024, or about 2.9 times global economic output. The larger $1.11 quadrillion figure also includes pensions, bank deposits, stocks, bonds, and other claims that are not debt in the everyday sense.
Strip all of those offsetting claims away and what remains is the world's actual net worth, about $600 trillion. That is simply the estimated value of its real assets, the houses, farmland, factories, offices, and equipment.
Questions people ask
What exactly counts as a real asset?
Real assets are physical and intellectual things that have value on their own, such as residential and commercial land, houses, factories, machines, infrastructure, and software. Financial assets, like stocks, bonds, loans, and bank deposits, are claims on someone else and always have an equal liability elsewhere.
What is the difference between the $322 trillion in debt and the $1.11 quadrillion in liabilities?
Traditional debt is borrowed money that must be repaid with interest, such as government bonds, corporate bonds, mortgages, and bank loans. Financial liabilities is a broader accounting category that also includes things like bank deposits, pension obligations, and the equity value of companies, which represent claims but are not borrowing in the usual sense.
If all debts cancel out globally, why does debt still cause problems?
Globally they cancel, but individually they do not. A household, company, or government still has to repay what it owes from its own income or assets, and if the value of its real assets falls it can end up owing more than it owns. That mismatch is why debt crises and defaults happen even though the world as a whole nets to zero.