Wednesday, March 14, 2018

350%: Impenetrable barrier, or cozy cushion?

Back in 2009 or so, if you were looking at debt in the USA
(What happened to the "A" in USA? Nobody uses it anymore.)
you'd see that when it got to 350% of GDP is when we got into trouble:

ContraHour's Graph from 2009
You may have to click the graph and make it bigger to read the numbers, but the blue line goes up and up and up to 350% of GDP by the end.

These days, after some revisions to the data, it seems debt has settled down to 350% of GDP:

Comparable debt today: 350% looks like the new floor
Nothing cozy about it. Long way down to solid ground.

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