Tuesday, May 24, 2011

The other big debt

I don't mean to be neurotic about this... but I want to compare my new look at debt to my earlier look.

The gold line here is the new look, based on the FRED numbers -- Total NonFederal Debt as a multiple of Total Federal Debt. Like Graph #8 from mine of the 22nd:


The blue and red lines show what I took to be Total Private debt as a multiple of Total Public debt. Where I messed up was that I counted "financial debt" entirely as private debt. In the gold line I fix that.

Just to add to the confusion, some of the difference between the lines here is because for the gold line, the government share includes only Federal debt, not state and local. The red and blue include all government: federal, state, and local.

Whatever. The lines show the same general trend. No longer can I say the economy ran into trouble when the multiple reached 3, and ran into crisis when the multiple reached 5. But that's okay.

There's still a lot more debt to consider than just the Federal debt.

And it is still true that times were good when the NonFederal debt was relatively low, in the 1950s and '60s. And that times have been hard since NonFederal was high.

No comments: