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Modern developed nation economies are becoming ever more Ponzi like as the amount of new debt needed to produce a Dollar of economic growth is increasing rapidly. For the record the general rule of thumb was that each borrowed Dollar created 8 Dollars of economic activity, but that was a long time ago. Expressed in constant Dollars and world GDP or Gross Domestic Product increased by 27 trillion Dollars from 2000 through 2015, at the same time debt increased by 87 trillion Dollars for a ratio of 3.22. Estimates through 2020 figure that an additional 3.6 Dollars in debt will be needed to produce each Dollar of GDP growth. This will push the global debt to GDP ratio to 235%, in 2015 it was 221% and 2000 saw 155%. These figures don’t include unfunded pension and benefit costs which are themselves substantial. It doesn’t take a Stanford PhD to realize that high and rising debt levels producing less and less economic growth is a recipe for disaster. Yet this is what we have along with ageing populations in the developed economies.

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