U.S. Credit Debt 1929-2008, by Sector

Nice chart from Morgan Stanley breaking down total U.S. credit market debt as a percentage of GDP since 1929. The differences in the debt’s composition from the 1930s to today are striking, with households, not corporates, being the credit problem children today.

Comments

[Nik Kondrat...:]

Paul,

Generally I find your posts provide a detailed level of analysis and insight. But your brief commentary has me perplexed this time. The MS chart you reference is pregnant with lots of insight into why we're on the cusp of an even greater depression than 1929-41, yet you give this chart short shrift.

If household debt is the single largest contributer to our 350% of GDP debt ratio, that would seem to be a fact worthy of explication, especially in light of the Geithner Plan for Wall Street which does nothing to address this.

We don't need to put taxpayer money into buying up "toxic assets" --let's call them what they really are: GAMBLING LOSSES--we need policies that protect average Americans, not reward fraudulent and reckless behavior on Wall Street.

Mar 24 11:22 PM

[Mbuna:]

Actually I would disagree with you here on who is the credit problem.. First, look at the financials. The graph plainly shows the bloating of the financial sector especially when you compare it more recently to corporates. Financials also show the biggest percentage increase in debt of all the sectors. Take away the last 10 years or so of wreckless lending and you will find that household debt was not much different from the 1930s. You cannot make that claim with the financials.

Mar 25 12:08 AM

[mauijeff:]

Do you think households are killing polarbears too.

Mar 25 12:08 AM

[Alan Young:]

Mbuna seems to have it right, just from eyeballing the chart, but I'd like to see more analysis from Paul (or someone who has dug into the source material). What exactly are these "financials"?

Mar 25 09:55 AM

[svkoho:]

I have read that the updated debt is closer to 450% of GDP and this obviously is an increase in the government component. Comment?

Mar 25 11:55 AM