How Much Debt Does It Take To Generate $1 In GDP?


Illustrated in one chart:

Answer:   It now takes $2.52 in new debt to “buy” $1 of economic “growth” or GDP.  Let that sink in.

It reminds me of what this chart predicted more than 2 years ago.


I’d say that chart was accurately prescient, no?   Two years ago, each dollar of debt destroyed 40 cents in productivity.  Now however, $1.52 is being sucked out of YOUR pockets and is destroying your jobs for each $1 in production or growth created.  Debt has long ago ceased to truly ‘create’ anything worthwhile and is now a massive force of destruction in our economy.

TrimTabs noted in their weekly forecast:

The surprising observation prompted us to examine the relationship between growth in debt and growth in GDP from 1975 through 2012. What we found is both astonishing and frightening. From 1974 to 1980, each $1 increase in GDP was accompanied by an increase in debt of between 20 and 47 cents. Since 2009, however, each $1 increase in GDP has been accompanied by a whopping $2.50 increase in debt. At some point, the amount of debt required to generate $1 of GDP will suffocate the economy and trigger another financial shock.

This is going to end well.  </sarcasm>