Hat tip: Global Finance Magazine
The graph above illustrates the total U. S. debt to GDP ratio over the period of the last 82 years.
More information:
Year | Real GDP | YOY % Change | Real Personal Income | YOY % Change | Total debt | YOY % Change |
2011 | 13227.9 | 2.24 | 11370.7 | 3.99 | 52603.8 | 1.53 |
2010 | 12937.7 | 2.17 | 10934.7 | -2.19 | 51808.8 | -0.87 |
2009 | 12663.2 | -4.55 | 11179.8 | -2.60 | 52265.5 | -0.32 |
2008 | 13266.8 | 1.61 | 11477.8 | 2.43 | 52433.4 | 4.78 |
2007 | 13056.1 | 1.24 | 11205.8 | 3.98 | 50043.2 | 10.34 |
2006 | 12896.4 | 3.05 | 10776.7 | 3.95 | 45353.9 | 9.87 |
2005 | 12515.0 | 3.28 | 10367.0 | 3.07 | 41279.4 | 9.15 |
2004 | 12117.9 | 4.12 | 10057.8 | 3.09 | 37819.1 | |
2003 | 11638.9 | 1.50 | 9756.6 | -0.20 | ||
2002 | 11467.1 | 1.59 | 9776.4 | 0.91 | ||
2001 | 11287.8 | 2.30 | 9688.7 | 3.51 | ||
2000 | 11033.6 | 4.17 | 9360.5 | 5.09 | ||
1999 | 10592.1 | 4.93 | 8906.9 | 4.85 |
Source: St. Louis Federal Reserve (FRED), Federal Reserve
I think that this largely speaks for itself. Some brief observations:
- The present trend is unsustainable.
- A lot of the growth of the last couple of decades was illusory. Increasing debt of itself makes growth look larger.
- There is no reasonably foreseeable level of economic growth that will bail us out of this problem.
- Deleveraging has barely begun.
- Deleveraging has stopped.
Exactly. What brilliant economic strategy will overcome this level of debt?
Steve
What brilliant economic strategy will overcome this level of debt?
Social fracturing, social unrest, hyperinflation, depression (economic, not emotional – although that probably wouldn’t hurt), revolution, war, famine & pestilence – roughly in that order but it’s always fun to spice things up a bit and mix up the order. And after all that? Happy days are here again!
Political unrest? Check!
http://www.nakedcapitalism.com/2011/08/only-17-say-government-has-consent-of-the-public.html