Two from The Economist on Old Core debt.
First one shows how we’ve collectively returned to the public debt levels, as a percentage of GDP, that we had coming out of World War II—roughly 120%.
Well at least it took the biggest global economic crisis since the Great Depression to achieve it.
Why it may prove much harder this time to whittle it down: personal and industrial and financial sectors are much more indebted now.
When all of those sectors are added together, the US is in the middle of the pack, as the second chart shows, behind Japan, Britain, Spain, South Korea, Switzerland, France and Italy. Collectively, the nation owes 3 times its annual GDP.
On households, I’m assuming they’re only counting the “underwater” portion of mortgages (the non-asset-backed portion).
The usual underlying logic on assuming debt that’s not asset-backed is that future growth will allow you to pay it off. But as The Economist warns, that’s perhaps a very poor bet in societies experiencing profound aging.