GDP To Public Debt Is A Chronic Problem
I am hearing and reading a lot of fluff about GDP numbers. Locking down an economy
and then comparing it a year later to the lockdown will produce these kinds of numbers.
but the numbers are misleading and silly to praise them if you understand what they mean.
I can certainly understand a layman to cheer the numbers but I am seeing self-proclaimed
"economic experts" cheer them. That is problematic.
I decided to share with you all some real numbers with a lot more meaning and put things
in perspective and added links for your review. Unfortunately, GDP to debt is something
I have to create since this is grossly overlooked by the cheerleading "experts".
GDP to Debt is important bc it is the report card of economic experts who affect all our lives.
the report card reveals the effectiveness of Govt "Stimulus for the people" over time.
Ideally, we want to see more than $1 of GDP for $1 of public debt added. While that is not
always possible over the course of time a $1 for $1 is just fine. Even momentary less than
$1 for $1 is okay. But when it becomes chronic, problems start to arise and consequences
eventually hit home all the way and up to the collapse of the economy.
statista.com/statistics/370937/gross-domestic-product-gdp-in-venezuela/
As I always say, it works great until it doesn't. It always feels great just before the cliff.
here are some real-world numbers for your review to help put things in perspective.
Since 2007 We have added $18 trillion of public debt and only got $3 trillion of Real GDP.
fred.stlouisfed.org/series/GDPC1
fred.stlouisfed.org/series/GFDEBTN
Since 2000 we have added $23 trillion of public debt and gotten only got $5 trillion of Real GDP.
Labor force participation in 2000 67.2%
Today it is only 61.5%
fred.stlouisfed.org/series/CIVPART
GDP to debt has been falling since 1981. meaning we are getting less and less GDP output for
every new $ printed out of thin air for the last 40 years. To me, that is a chronic problem
unrelated to Covid19. As I pointed out on April 2nd, 2020 and way before that if you have
been following me.
and then comparing it a year later to the lockdown will produce these kinds of numbers.
but the numbers are misleading and silly to praise them if you understand what they mean.
I can certainly understand a layman to cheer the numbers but I am seeing self-proclaimed
"economic experts" cheer them. That is problematic.
I decided to share with you all some real numbers with a lot more meaning and put things
in perspective and added links for your review. Unfortunately, GDP to debt is something
I have to create since this is grossly overlooked by the cheerleading "experts".
GDP to Debt is important bc it is the report card of economic experts who affect all our lives.
the report card reveals the effectiveness of Govt "Stimulus for the people" over time.
Ideally, we want to see more than $1 of GDP for $1 of public debt added. While that is not
always possible over the course of time a $1 for $1 is just fine. Even momentary less than
$1 for $1 is okay. But when it becomes chronic, problems start to arise and consequences
eventually hit home all the way and up to the collapse of the economy.
statista.com/statistics/370937/gross-domestic-product-gdp-in-venezuela/
As I always say, it works great until it doesn't. It always feels great just before the cliff.
here are some real-world numbers for your review to help put things in perspective.
Since 2007 We have added $18 trillion of public debt and only got $3 trillion of Real GDP.
fred.stlouisfed.org/series/GDPC1
fred.stlouisfed.org/series/GFDEBTN
Since 2000 we have added $23 trillion of public debt and gotten only got $5 trillion of Real GDP.
Labor force participation in 2000 67.2%
Today it is only 61.5%
fred.stlouisfed.org/series/CIVPART
GDP to debt has been falling since 1981. meaning we are getting less and less GDP output for
every new $ printed out of thin air for the last 40 years. To me, that is a chronic problem
unrelated to Covid19. As I pointed out on April 2nd, 2020 and way before that if you have
been following me.
Real Macro Economic Investing
patreon.com/Realmacro
patreon.com/Realmacro
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.