Two days back I showed you a striking similarity between Nonfinancial debt and GDP, a similarity going back three decades before 1980:
The similarity is somewhat less striking at the extremities when we compare Total debt and GDP for the same period:
Note that we are now comparing to 150% of GDP, not 135%.
You might want to say the two lines are still similar. But they are less similar. Now the blue line (debt) starts lower and ends higher than the red (GDP) line. Debt is growing faster. GDP is not keeping up.
Subtle? Sure. A subtle premonition of what was to come:
You might want to say there was no big difference between the lines until our economic policies changed in the 1980s. Well, okay. But I would remind you that those policies changed because there were problems already in the 1970s.
And I would point out that though the policies changed, there was no shift in the fundamental assumption that underlies policy: the assumption that we need credit for growth -- and more credit for more growth.
The only change in policy, really, was that we strengthened the urge to use credit. Since 1980, you don't have to zoom in, to see it.