The envelope please. Ladies and gentleman – we have a new record. The total credit market debt outstanding in this great country of ours is now $57.6 trillion. Take a bow and applaud yourselves.
What an accomplishment. Remember the storyline of this movie was supposed to be austerity and paying down debt? Well it looks like we have a surprise twist in the plot. Total credit market debt outstanding in 2008 when the country experienced the greatest financial meltdown since 1929 due to TOO MUCH DEBT was $53.5 trillion. The co-directors of this movie in Washington DC (Bernanke, Obama) have developed a fantasy storyline about deleveraging while we ADDED $4.1 trillion of debt to an already debt saturated economy. Over this same time frame the real GDP has advanced by $900 billion. Most of this was driven by government handouts and zero interest rates for the .1%.
The debt to GDP ratio of 345% is virtually the same as it was in 2008 when the worldwide economy imploded. Consumers aren’t deleveraging. They have added $45 billion of debt since the 3rd quarter of last year, mostly auto and student loan debt. Also known as subprime plus. The storyline about corporations being flush with cash is bullshit. They are flush with debt. They have added $1.7 trillion of debt since the depths of the financial implosion in 2009. Wall Street foisted $3.2 trillion of their bad debt onto the backs of taxpayers since 2008. Have you thanked a banker lately?
The result of all the Wall Street/Federal Reserve/Government machinations is an additional $5.6 trillion of debt dumped on the taxpayers by the Federal government. Every dollar of debt added is a future tax increase on someone. Our supposedly broke States have added another $131 billion of debts on the backs of taxpayers in their states. This will all surely end well.
We are on the cusp of another economic crisis caused by Bernanke and his debt bubble. There are no more contingencies. The powers that be have tried every trick in their book. There are no more fiscal or monetary shenaningans to try. The next step down is going to be a real doozy.