Global Market Crash Nearer Than Ever

[GodFearinGunTotin]

Today it's about 6 per cent of the budget. On par with the percentage from the 1950s though 80s. Spiked in 90s.

There will be a time to worry, perhaps, but today is not that day, nor is it on the horizon. Current levels are sustainable.

Just out of curiosity, what do you think the economy would look like with no government debt? What would a mortgage cost? Government debt isn't just something we owe, it's also something we own.

Like I said before, I hope you're right.

 

[BehindBlueI's]

Like I said before, I hope you're right.

My concerns lie more along the lines of what the economy is going to look like if the current trends in where the money is concentrated continue. The wage gap increases, semi-skilled jobs become more prone to automation, etc. The economy is plugging along pretty well. It's just not as spread out as it used to be. Those are the indicators I'll wait for before I hit the panic button but they will need to be addressed at some point as those trends are not sustainable.

 

[Sticky]

The step-son has been warning me about impending doom for over 2 decades. My prep hasn't changed in all that time. I still just buy ammo every month, one container at a time (pallets maybe?).

The Y3K scare worries me more.

 

[T.Lex]

Alarmism notwithstanding:
Chinese exports plunge 25% in February - BBC News

Exports dropped sharply by 25.4% from a year earlier, while imports fell 13.8%.
The weak data comes on the heels of Beijing registering the slowest economic growth in 25 years.
China's National People's Congress, currently underway in the capital, has just revised the 2016 growth target down, predicting a "battle for growth".

Kinda makes me wonder where the front lines will be in this "battle" for growth?

 

[BugI02]

It would be a shame if the populace grew restive and they had yet another peoples revolution. No iPhone 8 I guess

 

[rob63]

Today it's about 6 per cent of the budget. On par with the percentage from the 1950s though 80s. Spiked in 90s.

There will be a time to worry, perhaps, but today is not that day, nor is it on the horizon. Current levels are sustainable.

Just out of curiosity, what do you think the economy would look like with no government debt? What would a mortgage cost? Government debt isn't just something we owe, it's also something we own.

The problem I have with your line of thinking is that you are only considering debt as a percentage of federal outlays. It has went down since the 90's not because the debt has been reduced, but simply because interest rates have fallen and federal outlays have increased significantly. In other words, increasing spending makes the debt service a smaller percentage of the total budget, even though they have to borrow even more money to be able to do it.

Debt as percentage of GDP paints a very different picture of our current situation. As a point of reference, the European Union required nations to have a debt to GDP ratio of less than 60% before they could adopt the Euro as their currency. I don't know at what point this becomes unsustainable, but I can only wish that I could have your confidence that this is not a significant current problem. My biggest concern is what happens to debt service if interest rates return to the historical norm. Would the Fed even allow that to happen because of these concerns and what impact does that have on the economy? I admit up front that I don't know enough to be certain of anything, but it does worry me.
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source: https://research.stlouisfed.org/fred2/series/GFDEGDQ188S