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|User Info||The Truth About Budgets, For Both Left and Right; entered at 2011-07-17 13:38:45|
Max: Read it again, I added a second chart that resolves the issue you raised (there's a potential problem if debt is declining, but it's only happened four quarters since 1953!)|
MrBill: For every dollar of GDP increase you have, you can have one dollar of debt increase. This, however, does not resolve the problem due to the interest charged, so you STILL get recessions, since the interest expense eventually still "gets" you.
However, it's not a ponzi scheme. When you're using debt to finance consumption (or speculation) it is.