There's a bunch of other stuff that'll happen on the trouble too.
In 2008, the federal debt had increased from 4 trillion in 2000 to 8 trillion in 2008, but gdp was 14 trillion dollars. Today, debt is 32 trillion, but the GDP is only 27 trillion, and besides that, GDP(which we denote as Y) is divided into four components(Components of GDP). Consumption (C), Investment (I), Government purchases (G), and Net exports (NX).
Y = C + I + G + NX.
So there's some problems as a result of this.
Consumption is in trouble with households at record levels of debt, credit cards making up 1.1 trillion dollars for the first time ever.
Investment in productive assets has been in trouble domestically, with a continuous outflow of capital to other countries.
Government debt is at historical highs, and federal spending as a % of GDP is closer to where it was after the 2008 financial crisis than before it, so there's much less room to increase government in response to a recession.
The trade deficit has been so bad for so long people don't even pay attention to it, but it does matter.
This all leaves a lot fewer potential ways out of a recession than in the past, and they're already leaning on the levers they might rely on to get out of one..
It's making numbers look good in the short term, but I suspect it'll be like if you dip into your emergency rations before there's a famine -- eventually the famine comes and you have no food.
In 2008, the federal debt had increased from 4 trillion in 2000 to 8 trillion in 2008, but gdp was 14 trillion dollars. Today, debt is 32 trillion, but the GDP is only 27 trillion, and besides that, GDP(which we denote as Y) is divided into four components(Components of GDP). Consumption (C), Investment (I), Government purchases (G), and Net exports (NX).
Y = C + I + G + NX.
So there's some problems as a result of this.
Consumption is in trouble with households at record levels of debt, credit cards making up 1.1 trillion dollars for the first time ever.
Investment in productive assets has been in trouble domestically, with a continuous outflow of capital to other countries.
Government debt is at historical highs, and federal spending as a % of GDP is closer to where it was after the 2008 financial crisis than before it, so there's much less room to increase government in response to a recession.
The trade deficit has been so bad for so long people don't even pay attention to it, but it does matter.
This all leaves a lot fewer potential ways out of a recession than in the past, and they're already leaning on the levers they might rely on to get out of one..
It's making numbers look good in the short term, but I suspect it'll be like if you dip into your emergency rations before there's a famine -- eventually the famine comes and you have no food.
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That's definitely what happened after world war 1 and world war II. One thing that was a little bit different at those times is the country wasn't nearly as entwined in the entire world as it is today. That lack of investment in productive infrastructure would really bite hard in a world war 3 scenario. Meanwhile, China would likely be on the other side of the world war 3 scenario and they manufacture all of our stuff! (A long with Taiwan, who they'd either take immediately or bomb into the stone age)