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Our debt-to-GDP ratio was 120% at the end of WWII. What kind of bad things happened? The world's third largest economy (Japan) has been operating in the vicinity of 200% for years. What you say about all this may not really be worth very much.
Social Security is meanwhile sitting on $2.8 trillion worth of assets built up since 1983 specifically to help fund Baby Boomer retirements. All fears over the financial situation of SS are irrational. Medicare is a greater concern, but the single greatest thing we could have done to help out Medicare was to pass PPACA, which we did. That immediately put an extension on the books that reaches well into the 2020s. More will be needed, but none of that will come from Republicans, many of whom would rather destroy the system than repair it.
Japanese economy also experienced 2 lost decades after their 1980s boom. I wouldn't want to be in their shoes.
Not necessarily when interest rates are falling. And keep in mind that the rate payable on a given bond never changes once it's issued. A ten-year bond issued at 6.5% in 2005 can be replaced today with a bond paying less than half that.
Last edited by Major Barbara; 06-16-2015 at 10:16 AM..
Japanese economy also experienced 2 lost decades after their 1980s boom. I wouldn't want to be in their shoes.
LOL at the triteness. "Lost decade" is nothing more than a hackneyed and long ago worn-out political buzzword. People should know better than to trot it out in 2015. In relative terms, Japan's economy performed much better than ours did during the 1980s and on into the early 1990s. There were fears that Japan would simply buy up all of America in the near-term and become the world's dominant economy. Of course, that didn't actually happen. Instead the same sort of bugaboos that were soon to hit Mexico, Russia, and the rest of Asia also impacted on Japan. They had 5-7 down years as the result. Then they did very well again until the Great Recession came along. They were among the first economies to emerge from that, and charged ahead until earthquake/tsunami effects slowed them down again.
Meanwhile, a debt-to-GDP ratio hovering around 200% hasn't seemed to matter at all.
LOL! A stock market as a proxy for an economy. You must be an Austrian or something. And in any case, the notion of Japan's having experienced more than one (rounded up) lost decade is heterodox nonsense. Debt-to-GDP ratios may otherwise be interesting numbers, but they are nothing more than that.
You haven't provided any hard evidence that Japan did just fine. Japan's GDP today is lower than it was 14 years ago. While public debt has less of an effect on the economy than private debt, there is still a cost to having it(service cost).
Ray dalio has written in depth about the effects of over leveraging on economies. Debt can help an economy grow but there is a lower marginal utility as debt grows. The economy becomes very inefficient at very high debt levels. It's insanity to think debt levels make zero impact on the economy.
The main statements issued from these two empirical tests stipulate a negative effect of the total external debt to GDP and external debt as a percentage of GNI ratio on economic growth and a negative interaction between these two debt’ measures and investment.
You haven't provided any hard evidence that Japan did just fine.
Right. I would expect people to have sufficient backbone and intellectual curiosity to go look things up when they don't know or understand them rather than sitting there like some useless bump on a log waiting to have everything spoon-fed to them.
The simple facts of the matter here are that the nonsense term "lost decade" is a meaningless buzzword manufactured by deceivers hoping to manipulate the thinking of the more easily swayed among those who never understood the matter to begin with. Claims of not just one, but multiple "lost decades" are so much abstract piffle, as was pointed out above.
Quote:
Originally Posted by bigboibob
Japan's GDP today is lower than it was 14 years ago.
From World Bank Group data...
Last edited by Major Barbara; 06-16-2015 at 05:28 PM..
Right. I would expect people to have sufficient backbone and intellectual curiosity to go look things up when they don't know or understand them rather than sitting there like some useless bump on a log waiting to have everything spoon-fed to them.
The simple facts of the matter here are that the nonsense term "lost decade" is a meaningless buzzword manufactured by deceivers hoping to manipulate the thinking of the more easily swayed among those who never understood the matter to begin with. Claims of not just one, but multiple "lost decades" are so much abstract piffle, as was pointed out above.
Of more interest is Hillary Milhous Clinton's financial choices. Taking her at her own word, she said she & Bill were broke when they left the White House (due to legal expenses.)
Nowadays, she is about 1000 times wealthier than an entry-level one-percenter. Even her daughter & son-in-law are wealthy enough to purchase a $12 million apartment in NYC. That's some serious coin.
What she's done from a personal financial perspective is exceptionally impressive by any measure -- broke to multiple-hundred-millionaire in 14 years.
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