More on the flow of funds and the debt impact on the economy

To elaborate further on my previous note on the Fed’s Flow of Funds statement and to illustrate the impact of debt on our economy, over the past 10 years total US debt (households, business, government at all levels and domestic financial institutions) has basically doubled from $24.6t at the end of 1999 to $50.9t as of Q2 2009. Nominal GDP has gone from $9.6t to $14.1t over the same time frame, a rise of 47%. Thus in the credit driven economy that we’ve seen over the past 10 years, it has taken more and more debt to generate $1 of GDP growth.

Print Friendly, PDF & Email

What's been said:

Discussions found on the web:

Posted Under