How good is Thomas Piketty’s forthcoming book Capital in the Twenty-First Century? So good that it makes tons of incidental points that are amazing and probably worthy of a whole book of their own but that have almost nothing to do with Piketty’s main point or core thesis. For example, in this chart, which I made to be more readable than Piketty’s black-and-white charts, he shows that on a net basis the United States of America does not have any public debt and perhaps never did.

The conventional way for debt scaremongers to measure the national debt is to compare gross public debt to GDP. But the normal way you measure the debt load of a business or a household is to ask for a net figure. Just because you have hundreds of thousands of dollars in mortgage debt doesn’t mean you’re a pauper. In fact it probably means you’re a rich person who owns an expensive house. It is of course possible to take out a large mortgage and then end up “underwater” because house prices decline, but it’s simply not the case that a large amount of gross debt is a sign of overextension. It’s typically a sign of prosperity and creditworthiness.

