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XMFSinchiruna (27.58)

U.S. Debt and GDP: The Longer View

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March 23, 2010 – Comments (6)

These charts need to explanation, but in case they appear too small to make out the x-axis values, they each begin in April 1966 and proceed through the present day.

I find the miniscule scale of the dip in GDP in 2008 absolutely fascinating, but not for the same reasons that those who operate under the assumption that the crisis is over would latch onto the brevity of the nominal contraction. I am fascinated by the extent to which the GDP numbers post-crisis belie the true breakdown of productive economic activity during that timeframe ... achieved only through the unprecedented injection of trillions in government largesse. Since GDP presently says little about the real underlying state of affairs in our economy, then debt to GDP ... as scary as it presently is, remains vastly understated.

 

6 Comments – Post Your Own

#1) On March 23, 2010 at 9:36 AM, XMFSinchiruna (27.58) wrote:

P.S. For all the gold bashers who still perpertuate misinformed interpretations of the 1980 spike in the gold price and attempt to frame current events within that context, the above charts establish in the most simplistic visual terms for all to understand that expectations for gold to play out in a similar fashion this time around is a presumption lacking in any measure of logical foundation.

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#2) On March 23, 2010 at 10:36 AM, ryanalexanderson (< 20) wrote:

Dramatic! I wonder how it would look with all the other off-balance-sheet liabilities thrown in?

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#3) On March 23, 2010 at 10:50 AM, binve (< 20) wrote:

Great post!! Very similar to my thoughts here: (http://caps.fool.com/Blogs/ViewPost.aspx?bpid=357428)! Thanks man!

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#4) On March 23, 2010 at 1:27 PM, ChrisGraley (29.87) wrote:

Add a trillion dollar health care log to the fire.

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#5) On March 23, 2010 at 7:17 PM, dbjella (< 20) wrote:

Can't we get the Federal Reserve to write a giant check to all of our debtors?

Then we have no debt and live happily ever after. 

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#6) On March 23, 2010 at 7:23 PM, binve (< 20) wrote:

And Bernanke bless us, everyone.

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