I recently learned a staggering fact. Typically, in terms of the U.S. economy, the ratio between what our Gross Domestic Product is calculated to be and the amount of consumer debt owed to creditors is an indicator of the overall health of our economy. The size of this ratio has steadily been creeping up over the past few decades. People are borrowing more and more money to pay for the things they want and need. Throughout most of the early Twentieth Century, this percentage was calculated to be 30% to 50% of GDP but in the years 2000 through 2008, this percentage sky-rocketed to 100% of GDP. This means that the total amount of revenue generated by the consumption of all goods and services originating from the United States, currently estimated to be $13 trillion, was equal to the total amount of money owed by ordinary people to creditors. The last time economists saw such parity was in 1929 just as the Great Depression began to unfold.
I became aware of this ominous development by listening to a recent broadcast of This American Life. The show is dedicated to painstakingly yet entertainingly explaining the current crisis afflicting our nation’s banks and our government’s efforts in trying to avoid reliving some of the darkest days of this country’s history.
I’ve listed a sprinkling of titles below owned by the Austin Public Library that deal with some of the topics introduced by this concise and illuminating radio production.
Here’s another jarring fact. This is listed as Obstacle #1 in the February 2009 issue of, “Martin Weiss’ Safe Money Report":
“America’s massive accumulation of debts now totals $294 trillion. That’s 420 times larger than the $700 billion TARP bailout program and nearly 300 times bigger that the largest estimates of the Obama rescue package.”
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1 comment:
thanks a lot for this informative post. i especially appreciate the leads provided!
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