Wednesday, August 29, 2012

Solutions to All of Our Problems! v.9 (Musical Tribute)

More debt!

Click to enlarge.

Please ignore the highly correlated 2nd order polynomial trend line. That's just an artistic rendition of what could happen. We'll be far better off if nobody panics! Trust me on this one!

You sense urgency in my writing? No!! That's not it! Would I make this post a musical tribute if I wasn't incredibly optimistic about our future? More debt will give us more GDP! I'm almost sure of it! Just lose yourself in the moment. I have.


For the true optimists, here is another way of looking at the same data. This time I'll flip the axes and use an exponential growth trend line instead.

Click to enlarge.

One million dollars in inflation adjusted debt per capita here we come! Woohoo!

Oh yeah. That's what I'm talking about. We'll be so prosperous we won't even know what to do with ourselves, lol. Sigh. That's assuming there won't be an exponential trend failure at some point along the way of course. You know, like the one we already had. ;)

See Also:
Solutions to All of Our Problems! v.8
Trend Line Disclaimer
Sarcasm Disclaimer

Source Data:
St. Louis Fed: Custom Chart


Troy said...

I graphed Ryan's +12M job promise on the 133M jobs we already have.

Yeah, it was the same slope as the 1990s.

Looking at YOY jobs: we can see +3M YOY was the trend for the late 1990s boom, but the Bush Boom never got close.

A very large part of me wants the Republicans to take it all in November. The experiment will be interesting, and losing PPACA, my first two years of Medicare eligibility, and my SSA COLAs would probably be worth it in exchange for the continuance of the low capital gains tax regime, since my wage-earning days are numbered, as it were.

Stagflationary Mark said...


I think the smart party would want the other party to win it all this time.

"You want it so bad? Go for it. Let's see how you do."

I'm speaking as a permabear of course.

Mr Slippery said...

The sun lives at $50k of GDP and $150k of debt. Icarus flew too close.

Troy said...

The reality on the ground is that the (R) party is going to control all legislation for at least the next 2 years.

This limits the policy power of Obama of course. He's already a non-entity in my scheme of things through 2014, and perhaps his last two years as if the electorate wants the Republicans running the House and perhaps the Senate this year I fail to see what's going to change in 2014.

Romney, however, will have a new table to look at in 2013, with some options open to him.

Not quite the deleveraged tables Reagan and W inherited, but I think something to work with.

The Republicans are going to want their tax cuts on capital, and I think they can finesse the middle class hit for more than a couple of years to put off the pain of an allegedly revenue-neutral flat tax regime.

Expect to see a trillion dollar DOD appropriations bill. That's only up 25% from now and easily doable through Congress, especially if we pick a fight with Russia, Iran, China, DPRK, or all 4.

I don't see why the Fed can't dump another $1T or so into the economy again to grease the wheels in 2013-2014.

Japan had some sort of "Big Bang"-branded BS systemic reforms that didn't do a helluva lot for them but load up their debt/GDP to the moon.

The smart Republicans realize they've got one more juicy shot at their long con, and I don't see why they won't be able to do something really impressive.

What'd be really great would be for me to unplug myself in late 2012 and resurface on the net in 2014 to find out WTH happened.

This is kinda what my life in Japan was like 1993-95, I had no internet and was working like a dog so didn't get much news coming over the transom.

Stagflationary Mark said...

I've added a bonus chart for the true optimists.

Mr Slippery,

The sun lives at $50k of GDP and $150k of debt. Icarus flew too close.



What'd be really great would be for me to unplug myself in late 2012 and resurface on the net in 2014 to find out WTH happened.


Troy said...

We can probably get that $20T nominal GDP in 2020 that CBO's predicting with another 2000s-sized dose of consumer credit this decade:

That will give them another $10T of gov't debt to play with and still be under 125% debt to GDP.

Tax cuts and easy credit deals (I see 2% mortgage rates in our future) would be a pretty big juicer now.

This recession stuff is getting old. The boomer echo generation wants to fly now and there's more of them than the boomers even.

Now, alas, gasoline might go to $10 this decade, but that's a small price to pay for a New World Order.

Troy said...

They should print the $900B that the boomer echoers owe on their student loans.

They should print the $2.6T SSTF redemptions as they need to.

(I should buy gold.)

Stagflationary Mark said...

August 8, 2012
'Echo boomers' family delays are holding back home sales

This decline in births is striking, as most of the echo boomers are now in their childbearing years, 18 to 30. This should have led to an increase in the number of children born each year, but the echo boom is fizzling.