Martin Wolf on debt levels.

• Author: Rees, Matthew
• Position: Miscellaneous

"Comparisons between today and the deep recessions of the early 1980s are utterly misguided. In 1981, U.S. private debt was 123 percent of gross domestic product; by the third quarter of 2008, it was 290 percent. In 1981, household debt was 48 percent of GDP; in 2007, it was 100 percent. In 1980, the Federal Reserve's intervention rate reached 19-20 percent. Today, it is nearly zero."

"In the United States, the state of the financial sector may well be far more important than it was in Japan. The big U.S. debt accumulations were not by non-financial corporations but by households and the financial sector. The gross debt of the financial...