What if the proper comparison is not debt to GDP but debt to money supply? So you are really comparing an asset (money) to debt.
The ratio was 1.26 in 2008; 1.41 in 2009; 1.56 in 2010; and 1.55 in 2011. As long as this ratio doesn't keep increasing then there shouldn't be a problem right? Yea, more debt, but also more money to pay for it. No worries.
Update: Is the economy like a machine with 2 related levers, interest rates and money supply? You push on the gas when you want to speed up, and you pull up when you want to slow down. So it just needs more gas (money supply).
No comments:
Post a Comment