The real reasons why the US Economy can't reach Escape Velocity
The real reasons why the US Economy can't reach Escape Velocity. David Rosenberg, Chief Economist at Gluskin Sheff says the scars of the GFC have not yet healed and there are two impediments to attaining escape velocity. 1) Debt burdens globally are still far too high. World debt outstanding now amounts to about US$92-trillion or 125% of global GDP, about the same as it was back in late 2007. There is a plethora of scholarly research showing that anything over 90% on debt to GDP acts as a pervasive constraint on economic activity. 2) Demographics and insufficient baby boomer retirement savings. A recent poll showed that 14% of Americans 65 years of age and up have no retirement savings at all; 26% of those between 50 and 64 have no savings to speak of. The problem is not one of job creation or income. What is lacking is spending. (VIEW LINK)
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