US Total Financial Leverage 4.9X 1929 200501
May 1, 2020
While the cause of “The Great Depression” is still actively debated more than 8 decades after it occurred, one of the theories was, and still is, that we accumulated too much debt. To compare our current financial situation to the conditions in 1929 I will compare our debt and total financial liabilities with 1929 as ratioed with GDP. US Total Debt (Federal, State, Local, Household, Business, and Financial) was nominally 190% of GDP in 1929 and peaked at nominally 300% of GDP in 1933. But for purposes of this comparison, I will use the 1929 ratio of 190% of GDP to compare to our current indebtedness ratio since the 300% peak level in 1933 was caused, to a large degree, by declining GDP after the depression had begun.
It must further be recognized that in 1929 we did not have US Unfunded Future Liabilities for U.S. Government benefits, since it was the aftermath of “The Great Depression” that caused the U.S. Government to formalize the social benefit programs that we have in place today for which USAPonzi is now introducing these US Unfunded Future Liabilities.
For purposes of this analysis I will use the information from www.usdebtclock.org as of May 1, 2020.
|US National Debt
|US Total Debt
|US Unfunded Future Liabilities
|US Unfunded Liabilities (GAAP)
|US Total Liabilities
|US Total Debt 1929
US Total Debt includes Household, Business, State and Local Government, Financial Institutions, and the Federal Government debt.
US Unfunded Liabilities (GAAP) = $147.3 Trillion
US Unfunded Future Liabilities = US Unfunded Liabilities (GAAP) - US National Debt = 147.3T - $24.8T = $122.5 Trillion
US Total Liabilities = US Total Debt + US Unfunded Future Liabilities = $77.2 + $122.5T = $199.7 Trillion
Our “US Total Debt” leverage is currently 1.9X (361/190 = 1.9) the leverage we had in 1929 but our “US Total Liabilities” leverage, according to this analysis, is 4.9X (933/190 = 4.9) what it was in 1929.
This is why I predict that “The Greatest Depression” that will occur when USAPonzi Implodes will be much more severe than “The Great Depression”. We, as a country, do not have proper visibility to the financial crisis that we are facing because the U.S. Government is using a corrupt and fraudulent accounting system, Cash Accounting vs. the proper GAAP Accounting, which markedly distorts the U.S. Government financial condition and dramatically understates the public liabilities of the U.S. Government!
End of commentary