[Steven W.]

PS - the reason that chart is so misleading is that it tracks debt against GDP without the correlation that such ratios will decline significantly along with an economic recovery, exactly as it did after the great depression, which the chart presenter was so fondly trying to establish guilt by association with.

[Gunslingr3]

PS - the reason that chart is so misleading is that it tracks debt against GDP without the correlation that such ratios will decline significantly along with an economic recovery, exactly as it did after the great depression, which the chart presenter was so fondly trying to establish guilt by association with.

History doesn't jive with your observations. Why didn't the ratio of debt to GDP decline significantly after the '81 recession? From '85-'90 debt outgrew the economy, and the same thing happened again roughly 95-00. Do you think debt/earnings ratio can keep climbing without imperilling the ability to make current/future purchases? Please explain, I'm curious. If a someone is making $50,000/yr and servicing $150,000 of debt, do you think that negatively impacts his ability to make additional purchases today and tomorrow? Lower interest rates will increase the amount of debt he can service, but you do realize there is a limit, right? What happens when someone takes on more debt than they can service? They default. Many people are going to learn that what they always considered their savings were really someone else's debt, and when the defaults start rolling, well, we've played that game before...