How 'the Mother of All Bubbles' Will Pop

Wednesday, December 18, 2024

FT opinion columnist Ruchir Sharma writes about America's debt problem.

Posted by Corky at 07:30 PM | 11 COMMENTS | permalink | Comment on This Entry |

Here's a little secret: America doesn't have $36 trillion in debt because hardworking, everyday people have Social Security and Medicare. It's because billionaires and millionaires aren't paying their fair share in taxes. Plain and simple.
-- Trisha Carlson Davis (@kansasgal71.bsky.social) December 18, 2024 at 10:51 AM

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"But every hero has a fatal flaw. America's is its sharply increasing addiction to government debt. My calculations suggest it now takes nearly $2 of new government debt to generate an additional $1 of US GDP growth " a 50 per cent increase on just five years ago.

If any other country were spending this way, investors would be fleeing, but for now, they think America can get away with anything, as the world's leading economy and issuer of the reserve currency."

more at the link

#1 | Posted by Corky at 2024-12-17 03:34 PM | Reply

'Underperforming is not the same as , let's see, the DotCom crash of 2000.

#2 | Posted by MSgt at 2024-12-18 11:34 AM | Reply

The rich have so much power now that they can prevent the economy from ever being rebalanced.

#3 | Posted by SpeakSoftly at 2024-12-18 08:08 PM | Reply

Underperforming IS just another way of saying overvalued.

Which is the same reason the .com companies crashed.

Many internet companies were just way overvalued. Ridiculously overvalued.

#4 | Posted by donnerboy at 2024-12-18 08:10 PM | Reply

I am not at the point where I would call the current scenario the "Mother of All Bubbles" as the headline states.

But I am seeing some, what I call, caution signals.

For starters, when a lot of Wall Street says "buy."

This current exuberance about the stock market raises a concern for me.

But I am not a financial consultant.

#5 | Posted by LampLighter at 2024-12-18 08:12 PM | Reply

Looking at this from a different angle ...

Is Wall Street timing a stock market crash to occur once Pres-elect Trump takes office?

If so, why?

#6 | Posted by LampLighter at 2024-12-18 09:53 PM | Reply

The economy is cyclic.... timing is everything... Trumpanzee's insistence is Kamala's good luck.

#7 | Posted by RightisTrite at 2024-12-19 12:34 AM | Reply

Is the father of all bubbles religion?

#8 | Posted by Brennnn at 2024-12-19 01:06 AM | Reply

The DOGE effort will accelerate the problem outlined in the article. Members of the MAGA (nee Republican) Party will put through hundreds of billions of spending cuts, putting the US into an austerity footing, while also giving trillions in tax cuts to rich folks. Of course, the claim this time will be 'tax cuts create jobs and pay for themselves; the 2017 cuts just didn't have enough time to work, or Biden sabotaged them'. Wanna see deficits climb while unemployment rises and productivity falls? Just watch the next 12-18 months...

#9 | Posted by catdog at 2024-12-19 09:39 AM | Reply

When Warren Buffett heads for the hills,
I follow suit. And he has headed for the hills.

Big Money knows what is coming.

Only a fool gets caught 'holding the bag'
(or voting for Trump when we told you so)

#10 | Posted by earthmuse at 2024-12-19 11:27 AM | Reply | Newsworthy 1

"2017 cuts just didn't have enough time to work" the cuts expired for the middle class very quickly. It was built into the bill.

#11 | Posted by Brennnn at 2024-12-19 02:32 PM | Reply