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Old 05-28-2021, 04:28 PM
 
Location: Flyover part of Virginia
2,794 posts, read 1,381,274 times
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US GDP this time in 2000: $9.4T
US GDP now: $22.2T

US total (public/private) debt in 2000: $25.7T
US total debt now: $86.7T

$61T/$13T= $4.69 of debt added for every $1 of GDP growth in the past 21 years, an appalling ROI.

Why does it take so much debt to get a decreasing amount of GDP growth? It's simple, we are reaching the limits of growth due to the energy and resources limits of the earth. There are simply not enough resources and energy to keep running WalMart, Disneyland, the US military, commercial aviation/mass international tourism, the interstate highway system, car dependent suburban sprawl, the space program, mass mechanized agriculture, the national electric grid, etc etc, in the years and decades to come. These things will eventually go away, and never come back, no matter how much funny money the central banks print- in fact, QE, "stimulus," ZIRP, bailouts, and other degenerate, banana republic monetary tactics, are liable to make an already extremely dire predicament far worse.

Last edited by Taggerung; 05-28-2021 at 04:44 PM..
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Old 05-28-2021, 04:40 PM
 
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Well ROI isn’t a government metric and discounts any decline in gdp which would and most likely was offset by government spending.
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Old 05-28-2021, 05:07 PM
 
5,653 posts, read 3,653,152 times
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Assets=liabilities + equity

Once you understand the basics of that (that being assets have grown), then maybe you can attempt to understand that that 10 trillion growth in gdp is recurring year after year after year. But that increase in debt can be serviced with multiple years of gdp and again that 10 trillion gdp increase isn’t a one time thing that was paid for with the debt. The increase in debt supported the ability to earn 20 trillion. Then 20 trillion more. Then 20 trillion more....and so on.

On top of that, you’re comparing 1 year of gdp to the entire debt amount that’s due over decades. But over those decades, there will be hundreds and hundreds of trillions of gdp earned to service it.

But you’re not here to actually learn and discuss. You want to rant like you did in your other topics on the this very obsession that’s littered all over the front page.

Last edited by Thatsright19; 05-28-2021 at 05:31 PM..
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Old 05-28-2021, 05:36 PM
 
Location: Flyover part of Virginia
2,794 posts, read 1,381,274 times
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Quote:
Originally Posted by Thatsright19 View Post
Assets=liabilities + equity

Once you understand the basics of that (that being assets have grown), then maybe you can attempt to understand that that 10 trillion growth in gdp is recurring year after year after year. But that increase in debt can be serviced with multiple years of gdp and again that 10 trillion gdp increase isn’t a one time thing that was paid for with the debt. The increase in debt supported the ability to earn 20 trillion. Then 20 trillion more. Then 20 trillion more....and so on.

On top of that, you’re comparing 1 year of gdp to the entire debt amount that’s due over decades. But over those decades, there will be hundreds and hundreds of trillions of gdp earned to service it.

But you’re not here to actually learn and discuss. You want to rant like you did in your other topics on the this very obsession that’s littered all over the front page.
LOL

Borrowing $4.69 to increase your income by $1 is raw insanity, no matter what mental gymnastics you devise to justify it.
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Old 05-28-2021, 05:47 PM
 
5,653 posts, read 3,653,152 times
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Quote:
Originally Posted by Taggerung View Post
LOL

Borrowing $4.69 to increase your income by $1 is raw insanity, no matter what mental gymnastics you devise to justify it.
They also increased assets. And...those assets will generate return. The hope is that it will generate return in excess of the ultra low interest rate of the borrowed funds. Also, ROI is specifically not useful for long term time frames... and it’s a measure of profitability when a government is not for profit. Of course, you probably don’t know that on either account.

And again, you’re focusing on 1 year of earnings to a total debt figure due over many years. The debt is fixed (and being reduced in real term costs with inflation) but you’re getting that extra dollar over and over and over.

Say you have a college kid that borrows $46,900 to increase their earnings by an average of $10,000 per year. Would that be raw madness? Sure it takes a while to dig out and hit break even, but what about by year 8, 10, 15, or 30? That’s a lot of extra earnings.

Last edited by Thatsright19; 05-28-2021 at 06:25 PM..
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Old 05-28-2021, 07:29 PM
 
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The US harvested its demographic dividend around the year 2000 after women entered the workforce en masse and when baby boomers were at their earning peak.

The debt to GDP ratio then was in a little dip for this reason. To an extent the growth in debt since 2000 has been us paying the piper after decades of favorable demographics.

Japan peaked in 1990, the USA in 2000, and China peaked in 2018 I think. It's a natural process for industrialized countries after their labor becomes more expensive and people start having smaller families.

I know you are in favor of a smaller population. Well going into debt to pay for the numerous old people is one aspect of decelerating population growth.
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Old 05-28-2021, 07:37 PM
 
4,538 posts, read 2,090,116 times
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Quote:
Originally Posted by Thatsright19 View Post
The hope is that it will generate return in excess of the ultra low interest rate of the borrowed funds.
Speaking of, and to keep beating the demographics horse, interest rates are ultra low because the baby boomer generation has metric tons of savings just waiting to be lent out. Interest rates will rise as retirees begin drawing down their savings. It will also suck lots of money out of the markets. That is what will stop the long-term decline in interest rates over the past forty years.

So as long as you are borrowing at a fixed rate and term, now is the time to borrow.
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Old 05-28-2021, 08:14 PM
 
Location: Flyover part of Virginia
2,794 posts, read 1,381,274 times
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Quote:
Originally Posted by Thatsright19 View Post
They also increased assets. And...those assets will generate return. The hope is that it will generate return in excess of the ultra low interest rate of the borrowed funds. Also, ROI is specifically not useful for long term time frames... and it’s a measure of profitability when a government is not for profit. Of course, you probably don’t know that on either account.

And again, you’re focusing on 1 year of earnings to a total debt figure due over many years. The debt is fixed (and being reduced in real term costs with inflation) but you’re getting that extra dollar over and over and over.

Say you have a college kid that borrows $46,900 to increase their earnings by an average of $10,000 per year. Would that be raw madness? Sure it takes a while to dig out and hit break even, but what about by year 8, 10, 15, or 30? That’s a lot of extra earnings.
If someone spent $46.9K on college to increase their income by $10K over a span of 21 years (that's the time frame we're dealing with here) yes, I would consider that to be an extremely poor "investment."
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Old 05-28-2021, 08:26 PM
 
Location: Silicon Valley
6,432 posts, read 3,326,786 times
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meh...I dunno. Invert the PE on stocks. Something with a PE of 20 means paying $20 for $1 of earnings...which will hopefully repeat and increase. PE of 4.7 seems pretty cheap.
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Old 05-28-2021, 09:06 PM
 
14,089 posts, read 11,391,963 times
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Quote:
Originally Posted by Thatsright19 View Post
They also increased assets. And...those assets will generate return. The hope is that it will generate return in excess of the ultra low interest rate of the borrowed funds. Also, ROI is specifically not useful for long term time frames... and it’s a measure of profitability when a government is not for profit. Of course, you probably don’t know that on either account.

And again, you’re focusing on 1 year of earnings to a total debt figure due over many years. The debt is fixed (and being reduced in real term costs with inflation) but you’re getting that extra dollar over and over and over.

Say you have a college kid that borrows $46,900 to increase their earnings by an average of $10,000 per year. Would that be raw madness? Sure it takes a while to dig out and hit break even, but what about by year 8, 10, 15, or 30? That’s a lot of extra earnings.
Did you ? You are paying an over inflated price for that asset, and the next buyer has to pay an even more inflated price. The only party that benefits is the debtee.

I doubt that college kid will be guaranteed $10k/yr. And what do you mean by college kid borrowing money? For what school? Or some startup idea he has? Or is that tuition money? What is the interest on that $49,600?
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