There’s an interesting statistic over at ZeroHedge:
What one can also see is that the public cost of “normalization”, aka the Trade Off of the new normal is an additional $4.25 trilion in debt over and above where the previous historic trendline would put total US debt, just under $12 trillion. Instead total debt is now $16.2 trillion. Oddly enough, this translates to precisely $1,000,000 per job gained or saved from the first (and certainly not last) post-crisis trough: yet another fact that will not be mentioned in either the mainstream press or any presidential debate, as sadly trading off record amounts of public debt for new jobs is the only game left in town for either party.
A couple of observations. First, there’s a difference in category between private debt and public debt. You can combine them into a graph but that doesn’t necessarily mean it makes sense to do so. I do think there’s some point at which a high public debt becomes troublesome. I just don’t know where that point is amd I don’t particularly want to find out because it may not be possible to do much about it when it reaches that point.
Second, $1 million per “job gained or saved” might not be a bad deal depending on the job. If the job is an engineer earning $80,000 or a physician earning $180,000, it’s one thing. If it’s somebody handing out orders at McDonald’s earning $18,000 a year, it’s something else entirely.
However, I do have a question. Can anybody think of a reason that the cost (in public debt) per job should be linear in the number of jobs gained or saved? I don’t.
Typo Alert:
I just don’t know where that point is amd I don’t particularly [W]ant to find out because it may not be possible to do much about it when it reaches that point.
Missing ‘w’ above.
More substantively I’ve been trying to make the point for at least a couple of years now that we have NOT had an economic crisis in this country because of high levels of governmental debt. Not YET. But I would prefer to head it off before we find ourselves in a situation like Greece or Spain, because if that does happen to us we don’t actually have anyone to bail us out.
The reason we do not have problems similar to Greece or Spain is because we are a sovereign currency issuer. We can credit accounts at will while members of the EMU cannot. If you can’t credit accounts then your non-government sector can’t save without pushing the country into a depression, unless you’re running a large trade surplus. This is also why you can’t just divide the national debt by the number of jobs: government deficits are usually not caused by stimulus programs but by private sector savings preferences.