{"id":35196,"date":"2018-06-18T05:45:41","date_gmt":"2018-06-18T10:45:41","guid":{"rendered":"http:\/\/olduvai.ca\/?p=35196"},"modified":"2018-06-18T05:45:41","modified_gmt":"2018-06-18T10:45:41","slug":"americas-greatest-crisis-upon-us-debt-to-gdp-makes-it-clear","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=35196","title":{"rendered":"America’s Greatest Crisis Upon Us…Debt to GDP Makes It Clear"},"content":{"rendered":"

America’s Greatest Crisis Upon Us…Debt to GDP Makes It Clear<\/a><\/h3>\n
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America in the\u00a0midst of its greatest crisis in its 242 years of existence.\u00a0 I say this based upon the US federal debt to GDP (gross domestic product) ratio.\u00a0 In the history of the US, at the onset of every\u00a0war or crisis, a period of federal deficit spending ensued (red bars in graph below) to overcome the challenge but at the\u00a0“challenges” end, a period of federal austerity ensued.\u00a0 Until now.\u00a0 No doubt the current financial crisis ended by 2013 (based on employment, asset values, etc.) but federal spending continues to significantly outpace tax revenues…resulting in a\u00a0continually rising debt to GDP ratio.\u00a0 We are well past the point where we have typically began repairing the nation’s balance sheet and maintaining the credibility of the currency.\u00a0 However, all indications from the CBO and current administration make it clear\u00a0that debt to GDP will continue to rise.\u00a0 If the American economy were as strong as claimed, this is the time that federal deficit spending would cease alongside the Fed’s interest rate hikes.\u00a0 Instead, surging deficit spending is taking place alongside interest rate hikes, another first for America.<\/div>\n<\/div>\n
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\nThe chart below takes America from 1790 to present.\u00a0 From 1776 to 2001, every period of deficit spending was followed by a period of “austerity” where-upon federal spending was constrained and economic activity flourished, repairing the damage done to the debt to GDP ratio and the\u00a0credibility of the US currency.\u00a0 But since 2001, according to debt to GDP, the US has been in the longest ongoing\u00a0crisis in the nations history.
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\nBut what is this crisis?\u00a0 The chart points out the debt to GDP surges in order to resolve the Revolutionary war, the Civil War, WWI, and WWII. But the debt to GDP surges since 1980\u00a0seem less clear cut.\u00a0 But simply put, America (and the world) grew up and matured, but the central banks and federal government could not accept this change.<\/p>\n
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\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

America’s Greatest Crisis Upon Us…Debt to GDP Makes It Clear America in the\u00a0midst of its greatest crisis in its 242 years of existence.\u00a0 I say this based upon the US federal debt to GDP (gross domestic product) ratio.\u00a0 In the history of the US, at the onset of every\u00a0war or crisis, a period of federal […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[16387,195,3725,3575,14704,303,312,431,534,827,3650],"class_list":["post-35196","post","type-post","status-publish","format-standard","hentry","category-economics","tag-chris-hamilton","tag-debt","tag-debt-to-gdp","tag-deficit-spending","tag-economica","tag-fed","tag-financial-crisis","tag-interest-rates","tag-monetary-policy","tag-united-states","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/35196","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=35196"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/35196\/revisions"}],"predecessor-version":[{"id":35197,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/35196\/revisions\/35197"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=35196"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=35196"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=35196"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}