{"id":37021,"date":"2018-08-24T06:53:20","date_gmt":"2018-08-24T11:53:20","guid":{"rendered":"http:\/\/olduvai.ca\/?p=37021"},"modified":"2018-08-24T06:53:20","modified_gmt":"2018-08-24T11:53:20","slug":"how-wealthy-would-we-be-if-we-stopped-borrowing-trillions-every-year","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=37021","title":{"rendered":"How “Wealthy” Would We Be If We Stopped Borrowing Trillions Every Year?"},"content":{"rendered":"

How “Wealthy” Would We Be If We Stopped Borrowing Trillions Every Year?<\/a><\/h3>\n

These charts reflect a linear system that is wobbling into the first stages of non-linear destabilization. <\/i><\/p>\n

The widespread presumption is the U.S. is wealthy beyond words, and will remain so as far as the eye can see:<\/b> wealthy enough to fund trillion-dollar weapons systems, trillion-dollar endless wars, multi-trillion dollar Medicare for all, multi-trillion dollar Universal Basic Income, and so on, in an endless profusion of endless trillions.<\/p>\n

Just as a thought experiment, let’s ask: how “wealthy” would we be if we stopped borrowing trillions of dollars every year?<\/b> Or put another way, how “wealthy” would we be if the rest of the world stops buying our trillions in newly issued bonds, mortgages, auto loans, etc.?<\/p>\n

The verboten reality is our “wealth” is nothing but a sand castle of debt. Take away more borrowing and the castle melts away.<\/b> I’ve gathered a selection of charts that show just how dependent we are on massive debt expansion that continues essentially forever, as any pause in debt expansion will collapse the entire system.<\/p>\n

Corporate buybacks have powered rising corporate earnings–and the buybacks are funded by debt.<\/b> Corporate debt has exploded higher in the past decade, enabling stock buybacks on an unprecedented scale.<\/p>\n

Government debt–federal, state and local– is rising an exponential rates.<\/b>We’re not paying for more government programs with earnings–we’re simply borrowing trillions and hoping we can borrow the interest payments that will also rise along with the debt.<\/p>\n

Household debt, student loans, auto loans–all are soaring.<\/b> The corporate sector, government and the household sector–all are living on borrowed money, and relying on magical thinking to mask the inevitable consequences.<\/p>\n

Here’s debt to GDP.<\/b> Yes, the economy expanded, but debt expanded much faster. Every additional dollar of GDP now requires multiple dollars of new debt.<\/p>\n

<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

How “Wealthy” Would We Be If We Stopped Borrowing Trillions Every Year? These charts reflect a linear system that is wobbling into the first stages of non-linear destabilization. The widespread presumption is the U.S. is wealthy beyond words, and will remain so as far as the eye can see: wealthy enough to fund trillion-dollar weapons […]<\/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":[127,7783,195,9855,9854,587,868],"class_list":["post-37021","post","type-post","status-publish","format-standard","hentry","category-economics","tag-charles-hugh-smith","tag-credit-expansion","tag-debt","tag-linear-system","tag-non-linear-system","tag-of-two-minds","tag-wealth"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/37021","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=37021"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/37021\/revisions"}],"predecessor-version":[{"id":37022,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/37021\/revisions\/37022"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=37021"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=37021"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=37021"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}