LateMechanic
No bio...
User ID: 1841
LateMechanic
27d ago
To whitepillers: is there an argument for why I'm wrong
Whitepill, I would say I recheck this graph every so often to see if this ratio starts going up again. (Blue is all aggregate USD debt/gdp, red & green are more usefully decomposing that into private (at least non-federal) debt and federal government debt, and the bold black line is the ratio of red:green). Maybe you could slice the sectors up a bit more finely between households, firms, local/state governments, foreigners, etc., but I think this one pretty much gets what it's trying to capture.
Basically I think many agree that a big caution point for an economic crash/collapse is ballooning private debt. Most analysts now recognize there is just a fundamental difference between that and 'public' debt from the government that issues the currency, and that public debt is at least not as bad. I'd go much farther and say that by the accounting, the national government is more akin to the overall economic score-keeper, and that it would be rather goofy to think you're tracking something negative at all when counting up everyone's total outstanding scores and calling that 'public debt'. The national public debt is essentially our net money supply (money can be increased by other private debt, but not in net); our financial wealth.
So then, tracking private debt to gdp (red line) is some kind of a 'debt to income' ratio term, while private debt to public debt (black line) is a kind of 'debt to wealth' ratio. So I see the red line still steadily coming down since 2008's high, and the black line falling off precipitously after it rose to a huge level in 07/08. I've posted this a few times before, but in the US, our only 6 economic depressions were each immediately preceded by the only 6 multi-year significant reductions in the outstanding government debt. The 7th most significant government surplus run was less dramatic, in the late 90s, and directly coincided with the private sector going much more into debt, causing that bold black ratio to spike, running up until the 08 crash when the private sector forcefully deleveraged, also forcing the government hard back into deficit. So the intuition that government debt is destabilizing or that government surpluses are a good thing, that's what I see as dangerous. If we start getting more politicians in places of influence who think 'quadrillion' is one syllable or zero too far for economic well-being, and who start pushing for austerity and surpluses, that's when I'm getting back into prepper mode.
As others have mentioned though, none of this necessarily has bearing on all stock-market bubbles or corrections. It's just to say that 2008 was a different beast, and I don't personally see any table-setting for that kind of financial crash & great recession/depression angle. I'm still plowing each monthly paycheck into the broad market index and trusting the longterm, while kind of wishing it will dip long enough at some point for me to harvest some on-paper losses to pay less taxes.
I think there were plenty of us who did this in 2016, and then again in 2020, both after the primaries, if you wanted to see the democrats go in the bernie direction after being disappointed by obama and democrat supermajorities in 2009. Although the culture war issues shifted such that I just abandoned the democrats anyway instead of trying to push them in any direction.
Actually the Fuentes strategic vote-for-democrats angle didn't really make sense to me at first, as someone who never really had much hope in the republicans in the first place, and am still just wanting to see the current democrats punished, wiped out, and remade as something else. But then I realized it's almost an identical feeling for him and other young guys as the 2016 era bernie bros: they actually want to see a lot of the current republicans wiped out and remade as something better, and are looking strategically to the future: 'if hillary wins, the democrats are actually more fucked long-term, she'll be the automatic candidate again in 2020, some goof is her VP next in line, no more competitive primaries for a long time, people learn the wrong lessons, etc.'. 'If vance & rubio aren't severely damaged, then there won't be an open competitive primary with any oxygen for something better / more extreme in the republican party for a decade or more'.
Maybe it's always guys in their 20s who are more willing to make moves like this. Though as you guys mentioned, for a lot of people who could never stand the social stigma of switching to voting republican, the usual (more cowardly IMO) path is just to try to loudly vote 3rd-party as punishment to at least be slightly strategic as a voting block.
More options
Context Copy link