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>were all just barely over 100% debt / GDP when things went bad? Indeed. It's amazing to me that people don't blink an eye at borrowing 8-10x their annual inc
by forgetsusername 11y ago
>were all just barely over 100% debt / GDP when things went bad?
Indeed. It's amazing to me that people don't blink an eye at borrowing 8-10x their annual income to buy a home in California, but think the US economy, which can print its own currency, is going to fold with debt levels at 1x income and rates at historic lows.
- sillygeese 11y agoPerhaps those are not the same people? Bear in mind that printing currency is not without consequences either. It's not like each printed (and used) dollar is worth exactly as much as the previous one - otherwise hyperinflations could not happen.
- dllthomas 11y agoI think that metaphor is useful for driving intuition about how it might not be a problem, if people aren't seeing that. I do worry about relying on it much beyond that. Households, companies, and governments all have balance sheets, but there are tremendous differences.
- bsbechtel 11y agoActually, debt is held by the US Government, which has had historic average revenues of ~18% GDP. Therefore, to have 100% debt/GDP is actually the US Government borrowing 5.5x their annual income.