Saturday, April 30, 2011

Real Debt Growth Per Capita (Musical Tribute)

This is a companion to my last post on Real GDP Growth and the chart that went with it.



Now let's talk about real debt per capita. I'm adding up government debt, business debt, and household debt and adjusting it for inflation and population. This should show how much of a burden it is becoming for each of us (and our grandchildren).



Here's a look at the annual growth in that debt.



Now let's adjust the first GDP chart for population growth so we can make an apples to apples comparison. We will also trim the data so the time periods match up (1966 through 2010).



We've been borrowing from the future in order to boost the economy of the present. It is no longer as effective as it once was. Apparently the future is now.

These charts inspired by Charles Kiting from the comments of
this post. He said, "Looks like a 30-year credit bubble to me."

Eurythmics: Sweet Dreams (1983)



Sweet dreams are made of this
Who am I to disagree?
I travel the world and the seven seas
Everybody's looking for something
Some of them want to use you
Some of them want to get used by you
Some of them want to abuse you
Some of them want to be abused


Source Data:
St. Louis Fed: Federal Government Debt
St. Louis Fed: Household Debt
St. Louis Fed: Business Debt
St. Louis Fed: State & Local Debt
St. Louis Fed: Real GDP
St. Louis Fed: CPI
St. Louis Fed: Population

10 comments:

Stagflationary Mark said...

In case you are curious, I chose the color scheme of that debt per capita chart to reflect American values. There's red, white, and blue with just a hint of green for envy, lol. Sigh.

Troy said...

2003-2007 was something to behold:

http://research.stlouisfed.org/fred2/graph/?g=kP

$2T/yr debt flow to households and businesses!

at the time I simply had no idea, but the people who were getting paid to watch this stuff had to know what was going down.

I don't know which is worse, them knowing or them not knowing.

Of course, we do have to apply one transformation to these numbers, the interest rate. Halve the interest rate, and you can double your debt burden . . .

Nihon-e yohkoso!

getyourselfconnected said...

Nice!

Anonymous said...

"You don’t end up in the predicament we find ourselves in today due to a couple minor mistakes over a short time frame. It took thousands of horrible choices, colossal doses of delusion, a heaping of stupidity, and a mountain of denial over decades to put us on the brink of economic collapse. An unholy amalgamation of demographics, fiat currency, debt, taxes, power and greed have led us to this point."

http://www.theburningplatform.com/?p=14836

Charles Kiting said...

That green state & local section looks too consistent.

Stagflationary Mark said...

Troy,

Halve the interest rate, and you can double your debt burden . .

If you tell two friends, and they tell two friends, and so on, and so on... ;)

Stagflationary Mark said...

Anonymous,

Great quote! I'm a believer.

Stagflationary Mark said...

Charles Kiting,

It is harder to see the growth in the smallest sliver. If you look really close you can see that the green band has doubled in size.

That said, it was the least worst over the period.

Federal: +302%
Household: +253%
Business: +225%
State & Local: +116%

Stagflationary Mark said...

I must offer an apology to one poster today.

One of the comments was flagged as SPAM. I tried to use the Playstation 3 browser to mark it as NOT SPAM but something went horribly wrong.

The comment vanished.

It was a comment discussing Canadian debt.

Sorry!

Charles Kiting said...

Mark,

Yes, but most of that doubling occurred by the late 80's which seemed similar to the other sectors up to that point. I don't even recall any TIF districts existing until the 90's.

I'm, not saying your numbers are wrong, I'm saying the sate & local numbers being reported are "optimistic".