This is a stupid chart. It double or triple counts some debt. If you take out a car loan from GMAC and GMAC sells a bond to pay the auto seller, that debt is counted twice. And why no chart of assets? And why compare this debt number against a yearly number?
If I make $50,000 a year and get a 30 year mortgage for $200,000 my debt is now 400% of my GDP. Is that good or bad? I guess it depends on whether I want to sell you a big ass hunk of gold!!
I don't think you'd have enough to live on in that scenario after taxes, food, insurance, utilities, car payment, maintenance, etc. But give it a try and let me know how you're doing. I hope you don't have a family to support. Good luck!
"If I make $50,000 a year and get a 30 year mortgage for $200,000 my debt is now 400% of my GDP."
Sure, but so is your asset holdings. That $200K is backed by a $200K house. What backs our national debt or currency? Nothing.
The difference is, in your case you very likely have a future income stream that will increase more than your future expenditures, so that you can reduce your debt. You also likely have that now. Furthermore, you won't be borrowing $200,000 next year, or the year after, of any year into the foreseeable future. And you likely don't have a bunch of unfunded liabilities down the road.
In the case of the federal government, spending is increasing faster than revenues. There is NO plan to pay down the debt, or even achieve a balanced budget. They plan to borrow even more money next year compared to this year. And there are massive unfunded liabilites around the corner once the boomers retire.
I guess it depends on whether I want to sell you a big ass hunk of gold!!
Gold beats paper over the long haul every time. As for "selling gold", as least they are selling some tangible instead of passing paper around all day like "sophisticated" investors do.