tag:blogger.com,1999:blog-6885340672616713863.post8871659192089829615..comments2023-09-25T04:08:57.897-04:00Comments on American Counterpoint: Comment on Mark's Doom and GloomKeith Robertshttp://www.blogger.com/profile/18115490864347645607noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-6885340672616713863.post-54667303730507354422016-11-11T11:44:22.648-05:002016-11-11T11:44:22.648-05:00This is an excellent post, and I want to respond t...This is an excellent post, and I want to respond to it in more depth later but will make just one quick point now. Keith is entirely correct in observing that there are no statistical tools available that can be expected reliably to flag warning zones for either public or private debt. The problem is, of course, that peak debt calculations can only depend on subjective forecasts for the economy and can't be based on static ratios.<br /><br />If we can safely assume stable growth for many years into the future, there is indeed virtually no limit on how much debt we can take on, because a seemingly big debt burden now becomes progressively more manageable over time. However, the same logic works in reverse too, and a choppy or low-growth economy has far less debt capacity. If we assume a chronic recessionary environment going forward, one where rising taxes, regulation, fraud, mismanagement, lack of innovation, and a deteriorating work ethic depress growth for an extended period of time, then almost any debt at all becomes too much.<br />Mark Bachmannhttps://www.blogger.com/profile/16864483782023806885noreply@blogger.com