This weekend, I read an article in Money Sense talking about US debt - apparently, total US debt (personal, corporate and public) has now surpassed the previous record level achieved during the Depression. Measured wrt GDP, total US debt now exceeds 300% of GDP, while during the peak of the Depression the debt got to about 285% of GDP.
The Bush-lovers always talk about how Reagan proved "Deficits don't matter" but the total debt to GDP ratio in the '80's was well below the levels today, and still there was a recession immediately following Reagan. (I don't have the article with me, so I don't have the exact #'s)
Anyway, the article scared me more than a little. For starters, a lot of people believe that the 'debt wall' is responsible for a lot of recessions, and if this is even somewhat true, the results this time around could be pretty severe. As interest rates begin to rise (which is already underway) the entire economy could buckle under this debt load. The thing that really scares me is that GW could be in charge when this happens, and I don't trust the guy's economic policy under good conditions, never mind a disaster.
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