CLinton administration kept fixing the problems and forced the economy back up into a rebound.
Huh !
Wait til the debt bubble occurs...in sheer dollar terms, debt has ballooned. Household debt, including mortgages, has more than doubled since 1991, reaching nearly $7.9 trillion at the end of the first quarter, according to the most recent Fed data. Corporate debt has mushroomed almost as fast, topping $4.8 trillion. Add the debt from other businesses and nearly $10 trillion in debt from the financial sector, and the total exceeds $24 trillion.
That, of course, is more than twice the annual gross domestic product of roughly $10.3 trillion, and dwarfs the ever-popular federal debt, which checked in at a paltry $3.4 trillion at the end of the first quarter.
But debt is a double-edged sword. Companies, for example, have a tax incentive to fund expansion with debt - investments that, of course, can pay for themselves many times over and promote economic growth.
The issue, then, is not necessarily the absolute size of the debt, but how much it strains the borrower.
And by many of those measures, the situation is much less ominous, although hardly ideal.
To assess overall debt levels, the Fed, for example, tracks the debt of nonfinancial companies as a percentage of their net worth. Although it has ticked up slightly since the mid-1990s, it has plateaued at roughly 75 percent over the last four quarters, and is well below the levels of the early `90s, when it topped 90 percent.
Greenspan got in the way of a true economic cycle.
Walking on water is not easy. |
