Dividend Investing

2018 US Gov Debt Has Ballooned to 94% of GDP

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It’s always important to keep an eye on general market conditions and factors. I am by no means a debt expert, so I cannot give a proper signal on this, but it is interesting to note a few things:

  1. Main area/cause of 2008 crisis was high household and financial debt levels.
  2. But now, in 2018, household debt levels are below what they were then in 2007.
  3. Now, take a look at this chart from Blackrock Investment Institute. The big takeaway– US Government debt has ballooned from 52% of GDP in 2007 to 94% of GDP in 2018. [1]

What can this mean?

“Debt can improve the standard of living in a country by allowing the government to build new roads, improve education and job training and provide pensions. Budget deficits are critical to help make up for lower investment and private spending during an economic recession.

Too much government borrowing can cause economic problems by driving interest rates up and causing inflation.” [2]

[1] – https://www.blackrockblog.com/2018/09/18/better-prepare-for-crisis/
[2] – https://www.reference.com/world-view/pros-cons-national-debt-7b3a041e5b37c9c0
[3] – https://www.thebalance.com/what-is-the-public-debt-3306294