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| Click the Graph to Visit the FRED Source Page |
Why?
Because the change in total debt is a boost to GDP, and total debt is a drag on GDP.
The graph looks at both "change in total debt" and "total debt" relative to GDP. The general trend of the line should look like GDP except as it is influenced by "change in total debt" pushing it up, and by "total debt" pushing it down.
You can see by the trend that total debt is the dominant factor.
3 comments:
You object: "But debt is a stock. Debt accumulates. GDP doesn't. So of course the trend goes down!"
I respond: Yes, and that is exactly why we need policy to accelerate the repayment of debt.
Could you link to the page at FRED?
It's not clear to me what you're doing here.
Cheers!
JzB
Done.
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