Thursday, September 15, 2011

Total Debt vs. Total Wages

Click to enlarge.

We are so @#$%ed.

This post inspired by this post at Retirement Blues.

Source Data:
St. Louis Fed: Custom Chart


Stagflationary Mark said...

Blogger apparently has a bonus feature now.

Click on the chart to see it. The chart is centered on a black background with a close box.

If there are multiple charts in the same post then it also lets you toggle between them.


Jazzbumpa said...
This comment has been removed by the author.
Jazzbumpa said...

I wouldn't have thought to display it like this. Nice!

Note that the blue line period is almost constant, while the red line period is quite variable.

I'm not a big Bill Clinton fan, but every economic measure you can think of shows his superiority to the Rethugs. W is the Worst of the Worst.


Mr Slippery said...

The new blogger also lets you pick a mobile profile so the site looks better on mobile phones. Check it out.

At the least the ratio has been coming down since 2008. Most people are deleveraging, except for college students. Very little progress has been made on mortgage debt, but a lot of it will be defaulted away.

In Hell's Kitchen (NYC) said...

If Clinton hadn't happened we would have blown up sometime around 1995 instead of 2008. He just prolonged our trickle-down induced agony. It really was game over as soon as St. Ronnie got inaugurated.

Stagflationary Mark said...

Jazzbumpa (& In Hell's Kitchen),

My take on it is that Clinton was a bit luckier in regards to placing himself on the front end of a bubble, instead of the backside. Obama is not similarly lucky. It also doesn't help that Obama can't figure out how to create a job.

For what it is worth, I agree that W was the Worst of the Worst though.

I also agree 100% with the "trickle-down induced agony" comment! I am NOT a fan of trickle down economics. I think it just adds to income inequality (and that creates all sorts of instability and injustice).

What was wrong with trickle up economics? If workers have money then surely businesses would want to sell them products. How is this rocket science?

Stagflationary Mark said...

Mr Slippery,

Yes, there has been some progress I suppose. Back to the unsustainable trend line! Sigh.

Perhaps if we can hold it at 8 years then all is not lost (other than some very unhappy stock market investors counting on that 2.8% annual growth rate to goose their leveraged returns of course).

Stagflationary Mark said...

Mr Slippery,

One more thought.

I don't want to be alarmist but we seem to be spending a great deal of time below the zero line in the following chart.

Employment, Hours, and Earnings from the Current Employment Statistics survey (National)

For a better look, change the graph to be 12-month percent change. Ouch.

Troy said...

Debt to GDP also works . . .

Troy said...

heh I see that graph ends the post in the link, LOL

Kinda reminds me of the Challenger liftoff profile

Stagflationary Mark said...


Your GDP link has inspired a new post.

It makes me wonder if there is some sort of crazy connection between wages and GDP. Could it be? ;)

Troy said...

I find it humorous that there are investors who still haven't internalized what the following graph is telling them

you beat the rush on that, I only wised up after it was way too late (late 2006).

Stagflationary Mark said...


It has been one minefield after another since I retired in 1999.

Even if I have an 80% chance of avoiding damage with each step (generous odds at best), there's a whole lot of field left to walk. Sigh.

For example, the 30 year TIPS I bought in February are still treating me very well. Anything might happen in those last 15 years though. *shrug shoulders*

Mr Slippery said...

I don't want to be alarmist but we seem to be spending a great deal of time below the zero line in the following chart

Oh, be alarmist and proud. If there is one thing we've learned, it's that panic first is a winning strategy -- a Nash equilibrium.

Stagflationary Mark said...

Mr Slippery,

At best I'll only ever be paranoid and cowardly, lol. I'm always looking for something to spring out at me from the shadow [banking system]. You know, like a $2 billion trader going rogue! ;)

Anonymous said...

Nice graph. Along with the one in your post that follows , it contains just about all you need to know about the source of our economic troubles today.

At least one economist , Ben Friedman , noticed the change in real time , more or less , as evidenced here :

Science 24 April 1987:

"Until the 1980s the outstanding indebtedness of government and private-sector borrowers in the United States exhibited sufficient negative covariation that total outstanding debt remained steady relative to nonfinancial economic activity.....Since 1980 the U.S. debt markets have departed from these previously prevailing patterns, however, as both government and private borrowing have risen sharply."

Ahhh , how I long for the good'ole days when counter-cyclical gov't spending worked like it's supposed to.

My theory is that Friedman published this article in Science because the editors at mainstream econ journals wouldn't touch it with a ten-foot pole.

They had other plans for our economy , which have now come to fruition.

Stagflationary Mark said...


Great quote!

I also long for the good old days when stimulus found something other than commodities to inflate.

I have said this before, but I am not a believer that a commodity driven stock market can create real sustainable prosperity.

In Hell's Kitchen (NYC) said...

It's good to see I'm not alone in thinking that 1980/1981 is the pivotal time frame that put us on the road we are now on.

Stagflationary Mark said...

In Hell's Kitchen,

The first 20 years felt pretty good. The following 10 years felt like a hangover. The next ____ years will feel like @#$%. Sigh.

Just an opinion of course.