Investor20

I've seen that question when you posted it but didn't really want to engage because I thought you're part of the facts don't matter crowd. ....... If you implement H's plan you'll push investors to become more long term investors as opposed to speculators. Then basically everyone has to sharpen their pencils and do better research so they can hold companies longer which leads to better price discouraging. Basically nudging people from the CNBC crowd to the Buffett crowd. I don't see this hurting the markets at all and I think we could all do with a bit less speculation these days. These are just my initial thoughts. If you want to explore it further I'm down. Why would such a question be not about facts? To me it tells me HC just does not understand investment process, at least the Buffett type. You are supposed to hold or even buy more when it goes down and sell when it goes up, but this prevents such a process. If something is overpriced after holding for 3 years, why should that person be prevented from selling it? Buffett had hundreds of stocks during his 13 year partnership which works out to much shorter than 6 years of holding period. Even if you consider earlier Berkshire investments, it turns out much lower. Here is one study: "The median holding period is one year, with approximately 20% (30%) of stocks held for more than two years (less than six months)." of Berkshire holdings. https://www.cxoadvisory.com/7307/animal-spirits/why-dont-we-all-just-do-what-warren-buffett-does/

I think it's quite a useful point he makes. Basically, onyx doesn't really care to be rational, thoughtful, or reasonable in any sense of the word. For him, it's not at all about qualifications, demeanor, intelligence, or ethics. He finds Trump prettier than Clinton and will therefore unapologetically vote for him, for who says that reason, logic, or facts should play any part in deciding the leader of the free world? It explains nicely so many people don't seem to be acting rationally, and why the core of Trump's base is the racists, the violent, and the misogynists. This election might not be the battle of the sexes, the war of the corrupt, or the maverick vs. the establishment. It might actually be the fight between the reasonable and the unreasonable. (And one of the nice things about onyx's unreasonableness is that he can claim that everyone is like that, including him. It nicely avoids any sort of cognitive dissonance, enabling him to justify anything and feel good about himself, while still believing that people should take him seriously. I think it's pretty neat.) Richard, I tried to raise couple of times the issue of Hillary proposal of redefining short term capital gains to 6 years. I would not get one response. Why is that on a forum for investors? http://www.wsj.com/articles/clinton-to-propose-rise-in-capital-gains-taxes-on-short-term-investments-1437747732

We've run a trade deficit since the late 70s I believe. As given in the link above in trading economics it started in 1997 and increased rapidly. I think the technology enabled this, IMO.

Why would he criticize the trade deficit? Interest rates are at record lows and our currency is currently stronger than average. Our buying power is at a historic high while debt is the most inexpensive it's been in history. Running a trade deficit isn't only not a problem right now, it's likely the right thing to at this point in time. Now, if the deficit is perpetual and never shifts back the other way to neutral or a surplus over the years, then that begins to be an issue. But at the current time, I simply don't understand the criticism that's levied at the deficit. I don't think trade deficits are related to interest rates like budget deficits. It is a matter of consuming more than producing. Actually, it is not as simple because companies like Microsoft have few revenues from China. It is not like Microsoft does not produce, but they are not paid. The balance of trade is given here. Yes the longer we consume more than we produce, the more of our country foreigners own. Its being going on for a while and Buffett said it has to be fixed now in 2003! http://www.tradingeconomics.com/united-states/balance-of-trade

Little press and not touched at all in the debate is Hillary dream of open borders and open trade. The last point is important for stock purchases, IMO. In early 2000s I brought IFN, an Indian ETF. It did 18.6% vs S&P of 6.8% (morningstar 15 year total return). This trade was based on effects of outsourcing and who is going to gain and loose. This is despite the interest rates in India are steady or even increased and right now about 7-8%, vs US that are driven down to zero. My point is these policies hardly help the American worker or American investor. When Hillary says her dream is open borders and open trade, she just does not understand the economy.

I know, the big scoop, Hillary Clinton thinks that markets are important, should be transparent, and accountable. It's also been leaked that she was for free movement of goods, the keystone pipeline, and universal healthcare. You know things she said publicly before. I don't know what people think about the speeches. Does the right think she went into a room with hundreds of people and advocated for the rape and pillage of America??? Actually that is not just what Hillary said. It is reported - but bad news of Hillary is reported in a way not many know about it: "One excerpt put Clinton squarely in the free-trade camp, a position she has retreated on significantly during the 2016 election. In a talk to a Brazilian bank in 2013, she said her "dream" is "a hemispheric common market, with open trade and open borders" and asked her audience to think of what doubling American trade with Latin America "would mean for everybody in this room."" Emphasis in bold added. http://www.nytimes.com/aponline/2016/10/08/us/politics/ap-us-campaign-2016-clinton-podesta-emails.html?_r=0 I posted this article from Buffett couple of months back when many posters here jumped on me that I posted an old (2003) article. It is republished by fortune in April 2016 http://fortune.com/2016/04/29/warren-buffett-foreign-trade/ In 2003, the Oracle of Omaha saw the debate on free trade coming, and proposed a radical solution. Original title:"America’s Growing Trade Deficit Is Selling The Nation Out From Under Us. Here’s A Way To Fix The Problem–And We Need To Do It Now" Compare yourself what Buffett is saying and Hillary is saying and decide for yourself. Fortune notes: "In the article, Buffett proposes a novel trade system that is nonetheless along the lines of what Donald Trump and Bernie Sanders have proposed. Reached recently by Fortune by email, Buffett says that he still mostly believes in what he wrote in the pages of our magazine 13 years ago, “though the problem has diminished a bit because of the lower price of oil and our country’s increased reliance on domestic production.”” Emphasis in bold added

::) Yes effectively, to the extent a person like me who happens to follow news regularly was not aware of it. For example did you know about the below news reported in NYtimes? It is in above article I linked. "Those who do not get the once-standard treatment at the clinic, the nation’s largest cardiac center, are not told. “The patient is asleep,” he said. “The family never knows about it.”

http://www.cnn.com/2016/03/30/politics/border-patrol-union-endorses-donald-trump/ http://www.npr.org/2016/03/30/472420387/border-patrol-union-endorses-donald-trump http://www.nydailynews.com/news/politics/retired-ny-police-group-endorses-donald-trump-article-1.2604861 https://www.washingtonpost.com/news/powerpost/wp/2016/03/30/border-patrol-agents-union-endorses-trump/ https://www.yahoo.com/news/trump-border-agents-endorsement-wall-000000406.html http://www.theatlantic.com/politics/archive/2016/03/national-border-patrol-council-endorses-trump/476091/ http://www.nbcnews.com/card/trumps-law-order-talk-wins-over-largest-u-s-police-n649726 http://www.usatoday.com/story/news/politics/elections/2016/2016/04/13/el-paso-border-patrol-union-votes-back-trump/82969472/ http://www.chicagotribune.com/news/nationworld/politics/la-na-border-patrol-trump-20160511-snap-story.html http://www.nytimes.com/1996/09/16/us/fraternal-order-of-police-to-endorse-clinton.html http://www.usnews.com/news/articles/2016-09-16/nations-biggest-police-union-endorses-trump http://www.latimes.com/nation/politics/trailguide/la-na-trailguide-updates-1474052253-htmlstory.html http://www.nytimes.com/reuters/2016/09/26/us/26reuters-usa-election-trump-immigration.html http://www.politico.com/story/2016/09/immigration-customs-enforcement-union-endorses-trump-228664 http://www.bloomberg.com/politics/trackers/2016-09-26/immigration-union-ice-backs-trump-for-president-trump-campaign Some only see what they want to see and that seems to be a common thread among Trump supporters. I believe they feel that Trump is the underdog and it is human nature to want to see the underdog put it to the establishment. I would normally feel the same way, but from what I have seen of the man's character (or lack thereof) it would be impossible to support Trump. I never said it is not reported. I said, I did not come to know of it like many other things like Trump protests (or even fake protests) or what he said about a girl etc. It is really easy to find something you already know of. That is different from press high lighting and putting it on headlines. An exampe: There were drug shortages for a long time now and even rationing. But many are surprised when I say it. But here it is. Why can I find and not others? I knew it and looked for it. There is a big difference. Such shortages are the new normal in American medicine. But the rationing that results has been largely hidden from patients and the public. http://www.nytimes.com/2016/01/29/us/drug-shortages-forcing-hard-decisions-on-rationing-treatments.html?_r=0

I agree that most members of the press favors Hillary Clinton to Donald Trump. But the important question to ask is, why is that the case. I think there are a number of reasons. .......... It is not a question about favoring but a question of honesty. The press does not have any more right to give wrong information to favor a candidate than a doctor treats a patient on how much they like the person. I came to know about Border Patrol Agents union endorsing trump through a speech of Trump. I came to know of National Immigration Officers Union and many police fraternies endorsing Trump during debates. Are these endorsements not important when Immigration and National law & order is an important issue in the election. This is a black out of any positive news about Trump. Yet, the press highlights a fake protest that almost did not happen that so few turned up for protest. This is like one of the communist country mouthpieces, not the fourth pillar of our democracy. If there is one thing I learnt in this election and the discussion, it is press can lie lot more than I ever imagined. Look at this video of so called Trump protest where there are lot of press and few protesters.

Clinton Holds 41-Point Lead Over Trump Among Asian-American Voters: Survey - NBC News this only proves the polls are rigged. I am Chinese and I have not seen a single Chinese nearby supporting Hillary. Is this guy serious? Of course those polls are rigged against “The Donald”. In fact the whole system is rigged against him. We know this because The Donald himself has has told us so. And we know that Donald Trump always tells the truth. And the press is fair to Trump? The press coverage of Trump is "shocking" even for DNC! Read it for yourself: https://wikileaks.org/dnc-emails/emailid/13830 From: Miranda, Luis Sent: Thursday, May 12, 2016 9:42 AM To: Helmstetter, TJ; Regional Press Subject: RE: Tv coverage of protest great Yes, but going forward, when our allies screw up and don't deliver bodies in time, we either send all our interns out there or we stay away from it.. we don't want to own a bad picture: ......... Three person protest outside the RNC. Sad! [https://pbs.twimg.com/media/CiQZmmEUgAAyeKl.jpg] ............ -----Original Message----- From: Helmstetter, TJ Sent: Thursday, May 12, 2016 9:38 AM To: Regional Press Subject: Tv coverage of protest great Shockingly good coverage despite abysmal turnout. CNN and MSNBC using prominently. Fox News covering new developments in Benghazi. Note: Emphasis in bold added

Getting paid above 500K only in foreign countries 11 of 11 times and zero times in US coinciding with the time Hillary as secretary secretary of state is consipiracy and innuendo? And you may be missing the big picture here. People are supporting Trump because he does not need the 500K speaking fees and he is not taking money from ultrarich (which comes with favors). People are fed up with this money games where ultra rich fund the elections and after elections everything is against the small guy. That is why Bernie would have won the primary but not for the games DNC played. Where Has Hillary Clinton Been? Ask the Ultrarich http://www.nytimes.com/2016/09/04/us/politics/hillary-clinton-fundraising.html

I posted earlier and all of you guys ignored. Every BIll Clinton speech fees above 500K (11 of them) are from foreign countries while Hillary was Secretary of State. How come suddenly Bill became so famous in places like Nigeria and United Arab Emirates but not in America. This is well beyond smell. http://www.politifact.com/punditfact/statements/2015/apr/26/peter-schweizer/fact-checking-clinton-cash-author-claim-about-bill/ It is not just one or two to ignore. It is 11 of 11 speeches that are paid above 500K during Hillary tenure as state secretary are from foreign countries. It does not end there: "So in the time Clinton left the White House in January 2001 and when his wife stepped down from secretary of state in February 2013, Clinton indeed gave 13 speeches for which he made more than $500,000. Eleven of those occurred since January 2009, when Hillary Clinton became secretary of state. Only two happened before then." That is he not only became famous exclusively in foreign countries during 2008-2012, he was not that famous the 8 years before that.

Tennesse Obamacare premium hikes: Cigna asked for and received an average 46.3 percent increase. Humana asked for and received an average 44.3 percent increase. BlueCross BlueShield of Tennessee, which did not refile its request, asked for and received a 62 percent increase. http://www.tennessean.com/story/money/industries/health-care/2016/08/23/insurers-get-approval-for-2017-obamacare-rates/89196762/ Minnesota Obamacare premium hikes: Minnesota will let the health insurers in its Obamacare market raise rates by at least 50 percent next year, after the individual market there came to the brink of collapse, the state’s commerce commissioner said Friday. http://www.bloomberg.com/news/articles/2016-09-30/near-collapse-minnesota-insurers-up-obamacare-rates-by-half

OMG, muscleman, this is embarrassingly ignorant. You need to learn Civics 101. Separation of powers under the United States Constitution Check Chevron Deference. I am certainly surprised when I read this.: https://lawblog.justia.com/2012/05/21/chevron-deference-your-guide-to-understanding-two-of-todays-scotus-decisions/ "Under Chevron, even if a court finds that another interpretation is reasonable, or even better than the agency’s interpretation, it must defer to the agency’s reasonable interpretation." "A permissible construction is one that is not “arbitrary, capricious, or manifestly contrary to the statute.” In other words, it is a very low threshold of deference." - Not a legal advice and neither I am a lawyer

Very Nice Books and many recommendations for me. On value investing I found most useful are of Greenblatt - particularly The little book that beats the market. Simple and yet to point. The other one I recently read and want to read more is in psychology: Mastermind: How to think like sherlockholmes. May be there are much better books in psychology but it is simple enough for me and the main point is our brains are inherently wired to be lazy and biased and how to train like sherlockholmes (of course fictional character) to get out of this laziness. Not an investing book per se but still applicable in investing as investing is also behavioral.

"He incites violence in his followers. Not just hatred, but violence." "Intern involvement with protests is mentioned twice in the leaked emails. DNC communications director Luis Miranda bemoaned photos of an empty anti-Trump protest in Washington, D.C. in one email chain. Miranda said: “Going forward, when our allies screw up and don’t deliver bodies in time, we either send all our interns out there or we stay away from it.. we don’t want to own a bad picture.”" http://dailycaller.com/2016/07/24/leaked-emails-show-dnc-officials-planned-anti-trump-protests/#ixzz4LntZEb6Y It is DNC that is inciting violence by sending people to disrupt a peaceful rally. Why would anyone want to go to a peaceful rally and disrupt. If they want they can have their own rally and see who gets more people.

+1. What if people don't have 30% with Buffett either. In fact, Buffett would not have 30% in Berkshire if he is small investor. I think this is really getting ridiculous, set up only to show Trump get low points.

Or may be the border patrol agency and ICE know little more about the immigration and its problems than you, me or a joker like John Oliver? The ICE according to their statement "Crane said the endorsement was conducted by a vote of the union's membership and that Clinton received only 5 percent of the vote." That is a 95% majority of ICE membership supporting Trump! http://www.reuters.com/article/us-usa-election-trump-immigration-idUSKCN11W0YM

To me the biggest part I learnt is that he was endorsed by ICE union. http://www.latimes.com/politics/la-na-trump-clinton-debate-updates-trump-claims-ice-endorsement-1474943232-htmlstory.html And of course he was endorsed by Border Patrol Agents Union which many of my friends who support Hillary still does not know even though this happened a while back. Good he had a chance to tell people directly these things. http://www.npr.org/2016/04/04/472929173/union-representing-16-000-border-agents-endorses-trump

I think it is pretty simple actually. If interest rates are zero and one could get higher returns in other assets they would buy it. Berkshire is keeping money in short term treasuries, not long term. They just take their time to buy. But buffett never advocated keeping in cash. But interest rates cannot be this low for long term. If they are at zero for a prolonged period, even a 0.0001% returns is better than putting it in bank. This leads to weird things like having to value the stock market at infinite levels, which Buffett is getting at in below link: "If the government absolutely said interest rates are going to be zero for 50 years, the Dow would be at 100,000," Buffett told " Squawk Box ," stressing he was speaking hypothetically. "If you had zero interest rates and you knew you were going to have them forever, stocks should sell at, you know, 100 times earnings or 200 times earnings," he said. http://finance.yahoo.com/news/buffett-says-government-did-dow-124652732.html It also leads to weird things like business models that return only 1% become justifiable because the cost of capital is so low. The hurdle becomes too low for business people to select a business model. The business models then are to take lot of debt on a low ROIC business, still high returns because capital is free. "Interest rates have created "irrational competition," mogul Warren Buffett reportedly concurred in a meeting with a top venture capitalist." http://www.cnbc.com/2016/07/14/warren-buffett-weighs-in-on-interest-rates-and-irrational-competition.html

My argument is neither interest rates OR levels of debt are really correlated to GDP growth. Yes, my argument is that Fed has really little effect on long term economic growth. Example of low interest rates not improving GDP: Japan Example of higher debt not improving GDP: Greece, Spain The 1.5% GDP growth since 2008 is pretty low, compared to all other recoveries given in the world bank data. What we achieved in last 8 years is much higher total debt, getting stuck at near zero interest rates and historically LOWEST growth rates after a recession. I cannot differentiate between household debt vs Government debt when the households are on hook to pay more taxes - essentially paying back the debt. For example, whether I buy health insurance or I pay more taxes and government provides health insurance, are essentially same. Investor, i won't go into a whole thing of checking your numbers cause I don't have that much time and there's not that much in it for me. But usually when looking at recessions you look at peak to peak or trough to through, or trough to peak. 2008 wasn't any of those. If you were to measure things right you would not use 2008 but the trough in 2009. Also this recovery being below all others is way out there. This recovery being worse that the previous one yes. But the crash was also worse. It depends how you set your timeline. Are you trying to say that the 1930s were better than the 2010s? You also use different cases. Spain, Greece, Japan, US. Spain and Greece cannot borrow in their own currency whereas Japan and US can. Not to mention a whole other lot of circumstances are different between those 4 countries. Btw, the original argument was whether rates were too low for the US. I already stated why government borrowing demand is inelastic relative to rates but you keep going on about that. You say that people are on the hook for the gov't debt and they'll have to pay it down. There's a whole lot of complicated issues there of why they don't really. But let me distill it a bit. When in the past 100 years did the people have to pay down the debt? 200 years? is it imminent? In your latest post you mention that retirees would like 4% return then you make some bizarre statements like risk premia do not exist. I don't really get the point. Regarding the Fed, yes, they're cannot influence the long run growth rate of the economy. That's dependent on other things. But then you know, in the long term we're all dead. The Fed's job is the short term. To moderate the the business cycle. To help markets reach equilibria in an efficient manner. To take away the punch bowl when the party is getting out of control and spike the bowl when ppl are getting depressed. In all seriousness, i'm down to debate and engage in topics and debate things if you are serious. But it has to be in a direction. I'm not gonna engage in trolling. I'm not accusing you of anything, but we've moved a lot from the original topic. These are fairly complicated issues and I try to think and give reasoned answers. It's easy to pull on 10 threads but I won't be able to address them all in depth in one answer. My statements are pretty simple a) There is no data shown ever that zero interest rates increase demand (Eg. GDP) above what the GDP growth would be above 3% interest rates. Show me if there is data that I missed. It is not an opinion or argument, but rather a fact. b) If one were to tell for sure zero interest rates would be there for next 5 years, any person would then move the money into other asset classes that would hopefully grow above zero (housing, stock market). This is also a fact. So, people putting their money in zero interest rate bank account would necessarily mean there are lot of people who believe other assets (housing, stock market) would also return zero or worse in next 5 years OR interest rates would go up.

I'm not trying to create some relationship between interest rates and XYZ. I'm just saying what we've observed over the last 6 or so years in the US was enabled to a large extent by cheap capital. This may not hold true in the future, in other countries, on the moon, etc. :D Perhaps we are working through (or maybe it is permanent) a "demographic bulge" of cheap capital. Human capital is better educated than ever and can be allocated globally for practically no cost. Technology advances every day. Materials are cheaper to mine, products are cheaper to build and distribute, than ever before. Why should interest rates be high? "I'm not trying to create some relationship between interest rates and XYZ." Then how do you know interest rates have any effect on what happened since 2008? If there is no clinical study on a drug, how would one know taking that drug has cured a disease or a side effect? "Why should interest rates be high?" From a practical point of view, retirees typically look for interest income where a 4% return would ensure their savings stretch into retirement. But why would any one put that money into a bank account if other assets could grow faster than zero. For example, if someone can tell for sure S&P 50 will grow at 6% next 5 five years, why would that person put any money into bank at zero percent (and taxed at regular income tax rates than capital gains tax).

My argument is neither interest rates OR levels of debt are really correlated to GDP growth. Yes, my argument is that Fed has really little effect on long term economic growth. Example of low interest rates not improving GDP: Japan Example of higher debt not improving GDP: Greece, Spain The 1.5% GDP growth since 2008 is pretty low, compared to all other recoveries given in the world bank data. What we achieved in last 8 years is much higher total debt, getting stuck at near zero interest rates and historically LOWEST growth rates after a recession. I cannot differentiate between household debt vs Government debt when the households are on hook to pay more taxes - essentially paying back the debt. For example, whether I buy health insurance or I pay more taxes and government provides health insurance, are essentially same.

So you quote three things, but I see a different view than you: 1. Inflation: How are you measuring inflation? PCE (personal consumption expenditures) perhaps is more relevant than CPI? It is debatable. PCE has been rising: https://fred.stlouisfed.org/series/PCE 2. De-leveraging I believe Don has addressed the 'deleverarging' argument, but here is the graph of total securitized consumer credit, if you want a consumer rather than soverign measure: https://fred.stlouisfed.org/series/TOTALSL 3. Sluggish economy By what measure? Unemployment is below 5%. The stock market is near or above all-time highs. realGDP is up. I'm not sure how you are measuring this, as many of the main indicators of economic activity point to a very active economy. Perhaps you are looking at home sales? I am not sure that's the best indicator as it is usually considered a lagging indicator. ---- So the conclusion I see is: increased prices, increased economic activity, and increased leverage. IMHO this is all made possible by very low interest rates. It is difficult to show a correlation between debt and economic activity when Greece is one of the highest countries listed in "Increased Leverage" in the McKinsey report cited before. Difficult to show a correlation between interest rates and GDP too when Japan had low interest rates since early 1990s. The US percapita GDP growth since 2008 is pretty low, hardly ever exceeding 1.5%. If a medicine is not working this long, it is time to change the medicine. http://data.worldbank.org/indicator/NY.GDP.PCAP.KD.ZG?locations=US I am not clear if the "growth rates" are in real or nominal, but either way it is low.

I don't see why you would find it so nonsensical. In a situation when people are over levered and have a desire to delever they prefer savings (pay down debt) to goods. This is turns depresses the demand for credit which drives down interest rates and yes if that desire to delever is widespread enough and strong enough it can make the price negative. Also keep in mind that for the people who delever the interest rate is positive because they're paying down debt they've accumulated years ago at higher rates so effectively they're getting a pretty good deal. The theoretical reason why interest rates can't go below zero is that is that you can keep physical cash which pays zero, but physical cash does have carry costs that makes the minimum price for cash below zero how much below we don't know for sure yet. As you can see that's all market driven supply and demand no government. What exactly are you saying here? People would rather pay down debt than take it on creating a lack of debt. This reduction in supply of debt is so large and demand so high that investors are willing to lose money to get the debt?? The whole point of owning debt is to make money. This reminds me of philosophical arguments that become completely detached from reality and end in absurdity. The question that needs to be answered is, why would someone knowingly lend money at a loss? To claim this is market driven is bizarre given that central banks have printed trillions of dollars to artificially increase demand for debt for the very purpose of lowering interest rates. There's a reason this has never happened in the history of the world. What i am saying that people would rather pay down debt which reduces demand for debt. At the same time as the levels of debt go down the supply increases as well. This pushes down the price of debt - interest rates. If what you are saying - that interest rates are artificially low. Then what you would expect to see is levering up of the private sector, inflationary pressure, and a booming economy. Instead what you have is a sluggish economy, low inflation with a chance of deflation, and significant deleveraging of the household sector - all indications that that the interest rate is too high not too low. Now you ask since savers are profit seekers why would they lend at negative rates and take losses. I'm not gonna go into the whole economics argument behind it but choose a case that most are probably familiar. Let's pick Berkshire. They have about $73 billion in cash and face negative rates. They have 3 options: to lend it out at negative rates, build secure warehouses surrounded by armed guards and park it there, or spend it. Now of course Berkshire's decision will be dictated by the the level of the rates they'll behave a lot differently if the rate is -5% than if the rate is -0.5%. If rates decline from 0.5% to -0.5% they're likely not going to start building warehouses when rates cross the zero threshold, nor will they change their investment strategy and start spending their cash like crazy just because rates dropped 1%. So instead they take the negative rates and the losses that come with them. Btw, when the fed prints money it increases the supply of money, it does not increase the demand for debt. There are many assumptions you are making and using a circular argument. But to take the primary argument of yours that debt is decreasing is not correct. If you add the government, nonfinancial corporate and household debt, it is not going down. Afterall, we as tax payers are on hook for the government debt too. http://www.mckinsey.com/global-themes/employment-and-growth/debt-and-not-much-deleveraging You see US in "increasing leverage" in Exhibit 2 since 2007.