From the great Ed Yardeni:
The “Great Unwinding” of the private sector has been offset by the “Great Winding” of the government. ... While the debt-to-GDP ratio for the private sector is bound to decline, this ratio for the government is already rising sharply. Borrowing of the private sector has plunged this year, at the same time that borrowing by the US government has soared. The New Era crowd is convinced that the Old Era of excessive borrowing is over. In the New Era, there will be much less prosperity. Consumers will spend less and save more. ... The debt-to-GDP ratio, which has been rising for the past three decades, is now likely to decline for several years. The fin-de-siècle forecast makes sense for the private sector, but it may be underestimating the willingness of the government to take on lots more debt to channel capital back to the private sector and to fund public spending.
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