And you're back to averages missing completely why the higher debt is a problem.
You just keep on buying numbers be damned.
Assertion: Credit-market debt is too high. “Total credit market debt as a percentage of GDP rose from around 120% in 1980 to over 300% at present,” according to Marc Faber’s April 20 Gloom, Boom and Doom Report.
Response: It makes sense for debt (and assets) to grow faster than GDP in a flexible, financially innovative economy. Faber’s 300 percent figure includes corporate debt, much of which is cascading (for example, an auto buyer borrows from a financing company which borrows from the credit markets). Other causes of increasing U.S. debt are low interest rates and the increase in home ownership. The issue is not so much the level of debt but whether sufficient capital formation is taking place in a market-based way to maintain growth. I think it is.
The third quarter of 2005 was also the first since 1947 when net national savings as a whole went negative.
The official savings rate measure does not consider economic gains from patents, innovation, capital gains or land appreciation. Since 1997, Americans have cashed in more than $3.5 trillion in capital gains.
Yes, somebody has to have the money to finance the nation's ongoing shopping spree. Increasingly, however, it's not Americans, but their foreign creditors.
The fact that Americans have per capita assets of $89,800 makes us the top saving country in the world. (Japan is second at $76,900 per head.)
Tonelson is no different than Krugman or Paul Craig Roberts in that all of them intentionally ignore the facts to advance their anti-trade/anti-Bush agenda.
15 posted on 01/05/2006 10:10:58 AM CST by Mase