(US) Economic Reality Check

[NJ5]

I admit I should have been clearer about the conclusions I was taking from the graphs from the beginning, I guess sometimes people wrongly assume other people look at things in the same way. But anyway I still think the graphs have a lot of value, even with the inflation issue, so they shouldn't be dismissed as "almost useless".

Anyway, I think the situation in the graphs results from the government taking on the private sector's problems into its own balance sheet (via bank bailouts, extensions of unemployment benefits and many other initiatives). Effectively we're seeing the government attempting to prop up an unsustainable level of debt in the private sector, thereby getting into a lot of debt itself. The hope is of course that the economy starts growing significantly on its own, allowing the government to get out of the way and fix its own problems, but that doesn't look that likely.

If you see this as a Ponzi scheme (which many people do, and not only regarding the US economy), I guess the government is the buyer of last resort before the whole thing comes crashing down. On a related note, I read that unfunded liabilities of the US government (including social security payments etc.) represent more than 500% of GDP. With a lot of baby boomers retiring over the next decade, this (if nothing else) will cause major trouble.