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Is it more useful to talk about "Total US debt" than "US government debt"? When I first read your comment, I thought you were making the point that the article
by DougBTX 15y ago
Is it more useful to talk about "Total US debt" than "US government debt"? When I first read your comment, I thought you were making the point that the article was misleading because it was using a fraction of GDP as a measure, when it in fact the main feature graph is measured in trillions of dollars.
To a lay reader like myself, it would easily lead to confusion if people talk about different numbers without making the distinction clear. Is there a well known relationship between government debt and private debt? Or is talking up Total US Debt just a distraction from the article, which talks about Government Debt?
- pessimizer 15y ago>Is there a well known relationship between government debt and private debt? Yes. "[...T]he difference between the government budget deficit and the trade deficit must equal the difference between private saving and investment[...]" http://internationalecon.com/Finance/Fch5/F5-9.php http://internationalecon.com/Finance/Fch5/F5-9.php Holding the trade deficit constant and lowering government debt implies a rise in private debt.
- babblefrog 15y agoHow the heck would you hold the trade deficit constant, and why would you even if you could?
- pessimizer 15y agoI wasn't recommending holding the trade deficit constant, I was isolating the relationship between public and private savings. And if I ever say "all other things being equal," I'm not actually recommending that all other things be made equal.