So NPR has replayed parts of an interview once or twice where they have a professor who says something to the effect of "Right now, we're borrowing about 100% of our GDP, and the only other time that that's happened in history was 1929." This is supposed to be the key fact about our economy that shapes understanding of where we are.
I'm interested in that stat for what it says about how we get out of this mess. That debt level is high right now, but it will get lower because people pay off some of their debt (while at the same time not taking on any new debt), some will die, and some will declare bankruptcy.
This is a big deal because most of the economic activity that we care about is actually associated with borrowing on one side of the transaction or the other, and maybe both: you borrow money when you buy a car or a house, and then someone gets paid. Their employer almost certainly borrowed money to employ them.
So to figure out when the economy starts really moving again (if this debt level unlocks the mystery) the question for me becomes "how long will it take of us not borrowing anything until we start needing to borrow again?"
Think about it yourself: when do you think you'll next buy a car or a house or take on debt for another purpose? Sometimes these decisions get thrust upon us (ie car accident, birth of kids, etc.), but otherwise I'm thinking "three years."
Not cool.
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