The Current US Economic Divide Is “The Founding Fathers’ Worst Nightmare Come True”

Saturday, January 27, 2018
By Paul Martin

by Chris Hamilton via Econimica blog,
Sat, 01/27/2018

I have made the case that as goes housing starts (blue columns below), so goes jobs creation and more broadly the US economy. And as goes interest rates (black line below) and deficit spending (on an annual % change basis of total debt (essentially as a % of GDP), red line below), so goes new housing.

Simply, when deficit spending accelerates and interest rates are declining, America builds new housing and the broader economy hums. However, debt grows far faster than the resultant economic activity, and debt to GDP soars (yellow line). Conversely, when deficit spending is decelerating and rates are rising (as they are now), new housing creation decelerates/declines and economic recession is imminent.

The Rest…HERE

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