Monday, June 09, 2008

Debt

There is a ton of debt in the system which will blunt the effects of lower interest rates. I wrote this last week:

Total debt outstanding -- that is personal, corporate and government debt outstanding -- is $31.758 trillion. Total US GDP is $14.196 trillion. That means that there is 2.23 times the amount of debt in the US relative to the total value of the US economy.

Total household debt is $13.960 trillion. That means total household debt as a percentage of GDP is 98.33%. Disposable income at the national level is $10.502 trillion. That means that total household debt is 132.92% of disposable income at the national level.



Simply put, the US is literally drowning in debt. And it's going to take awhile to pay this debt off. ...

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