Built on the back of Debt!
Over the past 30 years our economy, and as a result, world economies, experienced the greatest prosperity the world has ever know, all built on the back of debt using the following stimulus.
*Consumer debt to disposable income doubled from 1980 to 2007, 60% to 125%.
*Government debt to GDP tripled from 1980 to 2012, 35% to 100%.
*Interest and mortgage rates dropped by 85%, from 1980 to 2012.
*Consumers could borrow with little proof of income, from 2004 to 2008.
As a result, GDP grew by 5.5 times, from 2.7 trillion in 1980 to $15 trillion today.
World economies, and their consumers have taken debt to their extreme limits. Europe is fast deleveraging, Japan is on the brink at 240% debt to GDP. Our state and local governments are broke.
NONE OF THESE STIMULUS CAN HAPPEN AGAIN!
Consumers can not double their debt again.
Governments can not triple their debt again.
Interest rates will not drop by 85% again.
Consumers can not borrow without proof of income again.
Without these stimulus, GDP can not grow by 5.5 times over the next 30 years again.
WE MUST NOW LIVE ON WHAT WE EARN.
*Consumer debt to disposable income doubled from 1980 to 2007, 60% to 125%.
*Government debt to GDP tripled from 1980 to 2012, 35% to 100%.
*Interest and mortgage rates dropped by 85%, from 1980 to 2012.
*Consumers could borrow with little proof of income, from 2004 to 2008.
As a result, GDP grew by 5.5 times, from 2.7 trillion in 1980 to $15 trillion today.
World economies, and their consumers have taken debt to their extreme limits. Europe is fast deleveraging, Japan is on the brink at 240% debt to GDP. Our state and local governments are broke.
NONE OF THESE STIMULUS CAN HAPPEN AGAIN!
Consumers can not double their debt again.
Governments can not triple their debt again.
Interest rates will not drop by 85% again.
Consumers can not borrow without proof of income again.
Without these stimulus, GDP can not grow by 5.5 times over the next 30 years again.
WE MUST NOW LIVE ON WHAT WE EARN.