Re: Update - Ratio of Household Debt to GDP Explodes

From: Jim Blair (see_at_sig.com)
Date: 06/17/04 

Date: Thu, 17 Jun 2004 17:54:36 +0000 (UTC)

"tonyp" <tonyp@world.std.com> wrote:
>
>"Jim Blair" <see@sig.com> wrote
>
>> But my question again: why compare household debt to GDP? Since they
>> don't even have the same units, the ratios you list have the units of
>> time (years). But what does that mean?
>
>
>It says something about how much time it would take for households (who produce
>the GDP) to produce the goods and services they must sell in order to pay off
>their debt.
>
>Surely, if you find one nation where the household debt equals GDP, and a second
>nation where the household debt equals 2xGPD, you would infer _something_ about
>the relative prospects of the two nations.
>
>-- Tony P.
>

Hi,

I could infer "something", but what? When I went into debt by 3 times my
annual income (debt = 3X income) it proved to be the best financial
decision that I ever made. Because I bought a house that I have lived in
for the last 38 years (rent free), while it has increased in value
(according to the Madison assessors office) by a factor of 6.

                     ,,,,,,,
_______________ooo___(_O O_)___ooo_______________
                       (_)
jim blair (jeblair@facstaff.wisc.edu) Madison Wisconsin
USA. This message was brought to you using biodegradable
binary bits, and 100% recycled bandwidth. For a good time
call: http://www.geocities.com/capitolhill/4834

Relevant Pages