Thursday, April 30, 2009

This Is How Much Debt We Have

I have been wondering about this: how does this economy bounce back after deleveraging?

In a previous post, I shared my concerns about a Wall Street rebound. I fail to see where revenue will come from, absent debt issuance and loan securitization. The consumer became addicted to the debt drug, to the benefit of financial markets.

Exhibit 1.

Massive Increases Across All Borrowers
(Note: Only Federal Debt Held by the Public is Included. This is typical in most reporting lines. Inter-governmental holdings, Social Security Trust Fund holdings for example, are excluded. As if those bonds didn't have to be paid off too.)

Exhibit 2.

It's not like all of that borrowing lead to equally massive GDP growth. It takes an increasing amount of debt to keep the same standard of living.

Exhibit 3.

Lots of debt, not so many people. We can't afford to LOSE JOBS when so much is riding on so few shoulders.

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