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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: bentway who wrote (240906)	3/15/2010 8:24:10 AM
From: ChanceIs	Read Replies (3) \| Respond to of 306849

>>>Every generation of payees said they wouldn't get theirs - but they did. So it will be with this one.<<< I have Rogoff and Reinhart's somewhat new book "This Time Iss Different" on my wish list. That would be wish I had the time to read it. I have it in my cart at Amazon. I have heard Reinhart lecture at the American Enterprise Institute, and cited several of their articles here. They are becoming quite the popular figures to quite amongst the pundits. The bottom line for this post is tat they project that when total debt to GDP hits 100%, then the shooting match is over. There are lots of ways to look at the US debt. For "regular" debt, we should be at the 100% mark in a few years. If you throw in all the unfunded mandates, then we are way over already. Its simple really. When the tax level gets so high that citizens can be taxed no more, and when the interest on the debt takes such a large portion that other obligations can't be met, then it is over. You can argue whether its 100%, 80% or 120%. The fundamental truth remains. And that is before we talk about the fact that the US duration of the US debt is on the short end, and hence the interest rate risk is huge, OTOH, if we are truly in deflation, then while in a precarious position WRT rising rates, rates realistically won't rise. But then there is that matter that if we are in deflation, young workers won't be getting jobs, those laid off won't be finding work, and the tax growth and requisite 3.4% GDP growth to service all the new debt won't be there either.