The Ongoing Debt Transformation

[cornermouse]

http://krugman.blogs.nytimes.com/2012/01...formation/

A followup on my note about US deleveraging. It turns out that if you measure debt as a percentage of potential GDP (as estimated by the CBO) and use a stacked-area graph, you get a pretty clear picture. Here it is, using nonfinancial debt (for reasons explained in the previous post):...
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And the related post it links to.

Debt And Transfiguration
http://krugman.blogs.nytimes.com/2012/01...uration-2/

Ryan Avent points out an important fact: if you look at total debt, public and private, the United States is doing better at deleveraging than countries that talk much more about the evils of debt than we do. I thought I would redo the calculation for the US so that I understood it. I focus on nonfinancial debt — that’s because money that banks owe to each other is more a reflection of the structure of the financial system than of the degree of overborrowing more broadly. So here’s nonfinancial debt, public plus private, as a percentage of GDP:...