The Federal Reserve has released the latest Flow of Funds report. This is a veritable goldmine of economic information about the US economy. There are a few points that really stand out to my mind.
All the figure area annually projected numbers.
Total debt outstanding -- that is personal, corporate and government debt outstanding -- is $31.758 trillion. Total US GDP is $14.196 trillion. That means that there is 2.23 times the amount of debt in the US relative to the total value of the US economy.
Total household debt is $13.960 trillion. That means total household debt as a percentage of GDP is 98.33%. Disposable income at the national level is $10.502 trillion. That means that total household debt is 132.92% of disposable income at the national level.
That's a ton of debt, isn't it?
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2 comments:
Here's an interesting thought...how much of the GDP is made up from servicing that debt (payday loans, credit card interest, underwater mortgages and all the funny money financial instruments that spread the junk all around).
I welcome insight into how to analyze the significance of how much of that debt is held in the country. If that debt is also someone's asset, what difference does it make? The debtor is paying interest as an expense. The creditor is receiving the interest as income.
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