Yesterday, I posted the article “The Illusion Of Prosperity.”
As I wrote, and discuss in the following video, the issues clearly illustrate that the U.S. consumer has steadily relied on increasing amounts of debt to maintain an artificial standard of living. Through the use of credit, personal and government, U.S. households have pulled forward future consumption. The weight of those outstanding obligations serves as a wet blanket on current and future economic growth.
The financial crisis in 2008 fractured the economy in ways that are clearly evident today. Addressing the troubling debt burden has been postponed through extraordinary stimulus, but the problem has only grown in size. This proves that a debt problem cannot be solved by using more debt.
Special thank you to Lance Roberts at Real Investment Advice for providing data and the concept behind this presentation.
Michael Lebowitz, CFA is an Investment Analyst and Portfolio Manager for RIA Advisors. specializing in macroeconomic research, valuations, asset allocation, and risk management. RIA Contributing Editor and Research Director. CFA is an Investment Analyst and Portfolio Manager; Co-founder of 720 Global Research.