Debt-to-GDP Reaches World War II Levels

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The first six charts are assembled from data published in the Federal Reserve Board's Z.1 release of Flow of Funds Accounts of the United States. The data for the second quarter of 2011 was released on September 16, 2011, so the charts reflect data through June, 2011.

Chart 1

Total Credit Market Debt Outstanding at the end of 2Q 2011 was $52.554 trillion, down $0.178 trillion or 0.34% from the record high of $52.732 at the end of 1Q 2009.

Total Credit Market Debt Outstanding at the end of 2Q 2011
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Chart 2

The data for Credit Market Debt starts in 1952. Up until 2009, the annual growth rate had never dropped below 4%.

The data for Credit Market Debt starts in 1952
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Chart 3

The Federal Reserve breaks down Credit Market Debt into two main sectors: Financial and Domestic Nonfinancial. This chart show the Financial sector.

The Federal Reserve breaks down Credit Market Debt into two main sectors
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Chart 4

Yes, deleveraging has taken place in this sector.

Yes, deleveraging has taken place in this sector
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Chart 5

The following chart shows Domestic Nonfinancial debt. It reached yet another all-time high in the second quarter of 2011.

reached yet another all-time high in the second quarter of 2011
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Chart 6

The data for Domestic Nonfinancial Debt starts in 1952. Its annual growth rate has never dropped below 2%.

The data for Domestic Nonfinancial Debt starts in 1952
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The following four charts focus on the Gross Federal Debt of the United States.

Chart 7

Our first chart show that debt back to 1925.

Our first chart show that debt back to 1925
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Chart 8

The bottom panel of this chart shows that Debt as a percentage of Nominal GDP is closing in on 100%, levels not seen since World War II.

The bottom panel of this chart shows that Debt as a percentage of Nominal GDP
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Chart 9

It was not too long ago that we were worried about the debt ceiling.

It was not too long ago that we were worried about the debt ceiling
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Chart 10

Trend line growth of Gross Federal Debt is running at 7.8399%. At that rate of growth, Gross Federal Debt reaches $20 trillion by August, 2015 and $30 trillion by October, 2020.

Gross Federal Debt reaches $20 trillion by August, 2015 and $30 trillion by October, 2020
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We are now going to shift our attention to three charts of the most recent budget data provided by the U.S. Treasury Department.

Chart 11

The first shows that the deficit once again grew larger in September.

deficit once again grew larger in September
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Chart 12

While off of its high of - 10.49% of GDP at the end of February, 2010, the current deficit is still running at - 8.65% of GDP.

the current deficit is still running at - 8.65% of GDP
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Chart 13

This chart compares the surplus/deficit with the year-over-year change in Gross Federal Debt.

upon the release of the Producer Price Indexes this morning
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We are going to finish with four charts based upon the release of the Producer Price Indexes this morning. Comments are on the charts.

Chart 14

52 trillion
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Chart 15

ppi processing
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Chart 16

ppi finished goods
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Chart 17

composite is peak
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