Saturday, September 17, 2011

Beyond the final frontier...

From yesterday's discussion

Jim writes:

Take a look at the TCMDODFS for 1970-2008 using the "change from yr ago,in $B". The graph then moves in stages. Up to 1985 there is less than $100B of additional liabilities. Then it jumps to several billion a year of added debt. Then in 1998 it jumps to around $1 trillion/year. Then around 2006 when the housing market started to unravel it jumps again for an instant and collapses.

Look at that pattern! I think I see a business cycle in there, one that does not match up with recessions very well.

I wonder if there were tax-code changes near associated with the peaks? (It wouldn't be a business cycle, then...)

Jim seems not to see an exponential curve in the graph. Obviously not after that final peak there. But up to that point, it could easily be.

Lots of things that grow, grow exponentially. It doesn't have to mean something. But it might mean something. So, there are things to explore...

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