Friday, February 27, 2009

1929: A year we don't want to repeat

The ratio of private household debt to Gross Domestic Product (GDP) is now 100 percent, according to Columbia University economics professor David Beim. In other words, the amount of money private individuals owe is now equal the total amount of goods and services produced in an entire year in the United States.

But it's not the first time this has happened. The private debt-to-GDP ratio hit 100 percent one other time in U. S. history: 1929.

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