"How Does This Ever End?" An Interview With Lacy Hunt

Tyler Durden's picture

The US economy is struggling with too much debt at every level. A debt jubilee isn’t going to solve it; and shifting demographics will likely make it worse. So, is America headed for two decades of lost growth like Japan? Dr. Lacy Hunt, who was interviewed by Erik Townsend on the latter's MacroVoices podcast, considers the endgame for the US economy... Well, we could get lucky, Hunt says.

"The US economy could experience a modern equivalent of the California gold rush. In the 1820's and 1830's, we took on a lot of debt to finance the early canals, steamship lines railroads - it was over-investment, over consumption. The panic year was 1838. Martin Van Buren was president, he didn't know what was going on. By this, the country languished very badly for 11 years, and then gold was discovered it California, led to a huge surge in national income, people were very careful how they spent their income.

"We paid off the debt of the 1820's, 1830's, and the economy recovered. In 1873, we had another panic year brought on by too much debt that financed the railroads - remember we built the central line first and then the northern and southern routes, a lot of feeder road industries that supplied the railroads over-expanded and it was over-investment, over-consumption.The panic year hit. Grant was no more knowledgeable of what was going on than Van Buren had been in 1838. We had no central bank, the government continued to balance its budget. We had a prolonged period of austerity, but by the early 1890's, the problem had been solved, and we began to go on our merry way."

"Irrational behavior" on the part of US policy makers means our economy will grow to increasingly resemble Japan's over the long term...

“I think that our results will mirror Japan over time, certainly not on a quarter to quarter or annual basis, but they’re public and private debt is just under 600% of GDP. Our total public and private debt is about 373%. They've tried to solve an indebtedness problem by taking on more debt. There are many many examples of what has happened to extremely over-indebted economies."

 

Hunt notes that there has been important recent work by Allen Taylor, also by a number of people in Europe. There is also work that’s been done historically. For example, the leader of The Enlightenment, David Hume- his famous paper on public finance, written in 1752 reaches the conclusion that:

...when a state has mortgaged all of its future liabilities, the state, by necessity, lapses into tranquility, languor, and impotence.

And there was Irvin Fisher’s 1933 paper on the consequences of extreme over-indebtedness, including pointing out that

"one of the factors that will happen will be that the velocity of money will be very weak, and so there has been a tremendous amount of work. It’s just generally speaking been ignored."

 

Hunt points to an excellent summary was published in 2010 by McKinsey Global Institute...

"They looked at 24 advanced economies that became extremely over-indebted. The indebtedness brought on a panic year, such as 1929, 1873, 2008, and they followed the process through to completion.

 

It’s a very long process, and what it shows is that an indebtedness problem cannot be solved by taking on additional debt.

 

McKinsey says specifically that multi-year sustained rise in the savings rate, what they term austerity, is needed to solve the problem, and of course, as we all know, in modern democracies, that option doesn’t seem to exist.

 

So, we try to continue to use what has failed, and while we get transitory improvement in economic activity, the longer-term trend is to weaker and weaker economic performance."

Moving on, Townsend asks, is the secular bull market in bonds really over?

"My view is that the secular low in long treasury bonds is not at hand - doesn’t mean that rates cannot go up, they have gone up quite a number of times since 1990 when this bull run started, but they’re not going to be able to stay up. The economy is too fundamentally weak."

 

"The main consideration for believing that the trough is not at hand, is that nominal GDP growth and also the inflation rate is not yet at its secular low. There have been many transitory swings that will continue to be transitory swings, but thecritical factors that determines the nominal GDP of both working lower experiencing considerably slower growth and money supply, and at the same time the velocity of money is in a major downtrend."

"In 1997, $1 of new M2 growth increased GDP by $2.20, and the first quarter of this year, it was down to $1.42. This reflects the fact that we have too much of the wrong type of debt. There are many other influences in velocity, but that’s the critical factor.

 

I think it’s important to remember that the velocity of money is very volatile.

 

The old secular low was reached at 1.2 in 1946, and that was the year in which we saw the daily, weekly, and monthly lows in the 30 year bond yield. Now, if that is the key factor, not the only factor, but the key factor, which is driving the velocity of money downward, then velocity is going lower because in Europe, which has debt to GDP ratio 100 percentage points higher than the U.S., velocity is at one and in China and Japan, which are also more indebted than the United States, velocity is around 0.5 to 0.6."

So, Dr. Hunt explains, the US debt load willl continue to climb and velocity will continue to slow - unless, of couse, "we get lucky."

The full interview courtesy of MacroVoices is below:

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GreatUncle's picture

End up like Japan ...

The principle when you have over powering debt like Japan you need to expand your real economy to bring it under control not just keep loading it with more debt and suffocating it.

doctor10's picture

steamship lines and railroads ain't EBT cards and free phonz...Lacy..but YOU knew that

GUS100CORRINA's picture

Finally, a set of charts that present a TRUTHFUL and COMPLETE economic explanation of world economies that INCLUDES DEBT!

So many presentations exclude DEBT which never tells the whole story. We are in uncharted territory.

Well done, well done!!!!

Paul Kersey's picture

The opposite of debt is profit. Tens of millions of Americans are in debt, through their credit cards, to Walmart, but the Walton family is realizing profits in the multi-billions.

The U.S. Government has run its debt total into the trillions by funding a panoply of elective wars, but defense contractors realize profits from these elective wars in the hundreds of billions.

The country goes into billions upon billions of dollars in debt funding EBT cards (food stamps), but JP Morgan makes billions of dollars administering the program.

TBTF banks make untold billions of dollars in profit by loading up Americans with trillions of dollars worth of debt by charging them 15% to 30% for credit cards, used car loans and who know what for student loans. The TBTF banks borrow that money from the Fed for less than 1%. The profits these banks make are in the hundreds of billions, while the losses incurred by student loan defaults are paid for by the taxpayers.

What serves as debt to the masses and to the country, serves a as multi-generational profit to the elite wealth extractors.

chubbar's picture

She is pretty quick to tell us that a debt jubilee won't work but doesn't get into the details on why it won't work? I would like to hear a discussion on the pros and cons of a debt jubilee. I'm quite aware of the fact that one persons debt is anothers asset and I do realize that pensions, et al are all based on assets that are in fact someone elses debt obligations.

I'm just wondering aloud whether there couldn't be a one time reset that erases debt, awards these asset holders something in return for losing those assets, nullifies derivatives and essentially resets the world back to a monetary system that doesn't require exponential growth in order to work?

This isn't my area of expertise but I'm quite sure that someone has worked through the problem. So power struggles aside (which could be insurmountable), is there a reset that would allow a minimum of disruption, free us from the indebtedness problem and allow the world to go forward? If not, why not (just for my own curiosity)

I'm not addressing the issue of fairness here, just approaching this from a monetary/mechanical side. Clearly one of the problems is those not producing or the misallocation of capital so that businesses that are viable now, would not be after a reset and also the issue of gov't largesse. Perhaps it is an intractable problem that can't be politically addressed. Just wondering if anyone can point me to a discussion of the above?

Jimmy Jimmereeno's picture

Lacy is a he.

The jubilee concept would stiff the creditors; probably to the point of social chaos and a complete societal breakdown.

Antal Fekete has written extensively about the gold coin standard, redeemability, and an open mint as a viable solution to the debt problem that Hunt illustrates so well.

veritas semper vinces's picture

The whole financial system in the West is BASED on debt. The creation of "money" is based on debt. Debt can not be repaid bc the whole system will collapse.A jubilee will probably have the same result.

It is amaizing that not one of all these "analysts" can point to this simple truth

Creative_Destruct's picture

A total and sudden debt jubilee would be a 2008-2009 downturn event on steroids. That was essentially a sudden debt repudiation caused by the recognition that CDOs and other engineered debt instruments created to give "safe" yield to pension funds  and other financial institutions were effectively phony statistically engineered garbage. Multiply that by a factor of 2 to 10. The shock to society from a sudden jubilee is possibly fatal.

The system is beyond being HOOKED on debt. It's more a like a fatal addiction to a drug that is both craved for the pleasurable effect and that has also become necessary for the addict's physiology to sustain life.

CC Lemon's picture

Since debt=money, a debt jubilee (write off all debt) would result in a simultaneous disappearance of all money?

It's my understanding that debt jubiliees in the past invovled giving back what the debt was borrowed to buy (not sure).

A deeper treatment is in "Killing the Host" by Hudson.

http://michael-hudson.com/2015/09/killing-the-host-the-book/

But most of western society is not productive, and requires consistent increases in debt to stay employed.

We'd have to shift from continuous debt expansion to hard money, which meant all governemtns would have to have balanced budgets.

No way that would ever work, in anybody's imagination.

But the same result will come sooner or later, shit will keep expanding until it pops, then it's on like donkey kong...

 

doctor10's picture

"debt jubilees" have actually been the norm throughout human history. The re-balancing of society was considered normal and healthy.

karenm's picture

Some think USA is Japan, therefore it can go on for much longer. They are wrong, and here's why.

 

We live in a global, one world system already. When a nation like Japan starts collapsing, its weight is supported by the rest of the world, the other nations.

How? By allowing Japan to vastly devalue their currency, ie; Print like madmen

This is a burden for all other nations, where Japan exports its inflation to and sends worthless Yen. That Yen is converted into a more stable currency and the losses are eaten.

This system works if there's only a few "Japans" but when too many spring up, as we are seeing now, this system cannot function, since the support is not strong enough. Other nations cannot hold up all the weight.

 

So, USA will not carry on like Japan for decades. Especially considering that we have other "Japans" now too, nations not as large but cumulatively they are very heavy. Greece, Venezuela, Brazil, etc

 

So, USA is far too heavy a burden to be thrown on the pile at this stage, the world cannot hold it up, especially while holding up the other non-functionining nations.

SeuMadruga's picture

"They've tried to solve an indebtedness problem by taking on more debt."

In this era of "Homeopathic Economics", for how long is the placebo still going to work ?

Lost in translation's picture

Saw that 8th graders on a field trip refused to be photographed with Paul Ryan.

I would applaud that except the reason given was that he isn't providing sufficient amounts of socialism to suit the little brainwashed maggots. "He's cutting public education! He's taking away America's healthcare!"

Indoctrination success.

SmallerGovNow2's picture

BARRACK HUSSIEN OBAMA... UMMM, UMMM, UMMM...!

Arnold's picture

Sooo..., we nee an influx of alien technology, stat.
Zero Point Energy?

factorypreset's picture

‘You've got to ask yourself one question. Do I feel lucky? Well, do ya, punk?’

HalinCA's picture

A nice idea, but it will be metered out by TPTB  and you can bet your ass it will be used to further their control of the planet.

 

I vote for another Carrington event to equalize the survivors back to the 1830s.

 

Batman11's picture

Why doesn't anyone see the problem of debt?

It's missing from today's economic models.

The FED’s models always show things should get better but they don’t:

http://4.bp.blogspot.com/-5utH2NlaeI4/U3IIaPM7Y7I/AAAAAAAAMbA/Uh_e5okMNWw/s1600/Fed+GDP+forecasts.PNG

When you don’t include the debt that is causing the problem this is what your forecasts will look like.

The IMF’s forecasts are the same:

http://static4.businessinsider.com/image/56cd9d646e97c61d008b9408-800-600/screen%20shot%202016-02-24%20at%207.05.40%20am.png

The IMF predicted Greek GDP would have recovered by 2015 with austerity.

By 2015 it was down 27% and still falling.

The effects of debt are missing from their models.

Debt is the problem and these clowns can't see it.

Roll out bad economics globally and you get one hell of a mess.

 

Richard Koo has explained the effect of debt on Greece to the clowns at the IMF:

https://www.youtube.com/watch?v=8YTyJzmiHGk

Why hasn’t Japan recovered since 1989?

It’s been paying off the private debt that built up in the economy before 1989.

That’s in the video too.

 

 

Batman11's picture

Capitalism can be based on debt, as it was in the 1920s US.

Debt based consumption and speculation gave the US the roaring twenties and then the Great Depression.

Keynes recognised this model was not sustainable and used strong progressive taxation to provide subsidised housing, health, education and other services.

We forgot why Keynes had made the changes he did and went back to the old unsustainable, 1920s, neoclassical economics.

It was the same.

You can only saturate an economy in debt once.

https://cdn.opendemocracy.net/neweconomics/wp-content/uploads/sites/5/2017/04/Screen-Shot-2017-04-21-at-13.53.09.png

Well the US has done it twice and it took them along time to forget the Great Depression before they did it again.

https://cdn.opendemocracy.net/neweconomics/wp-content/uploads/sites/5/2017/04/Screen-Shot-2017-04-21-at-13.52.41.png

That last spike in debt is the speculative surge that comes before the crash, 1929 and 2008.

Pity the clowns at the FED didn't see it coming.

Steve Keen was looking at private debt and saw 2008 coming in 2005.

 

 

Nockian's picture

Capitalism is based on time deferred consumption. The rule that one cannot have ones cake and eat it, nor can eat a cake before one has it. Debt is a function of a loan of that under consumption to a party who promises to repay that loan at a future time.

Over centuries what has happened is that people have been deprived of their property rights. They are being looted by a thug with a gun aimed at their heads. As things get worse, then these thugs will come for whatever we have left and we will be powerless to stop them. Their aim, stated or not, is to return us to slavery which we will be told is 'necessary' for the good of all-anyone who attempts to speak out will be clubbed to the ground until they quit.

We should wake up to the fact that we are in a fight for survival against a very cunning and vicious evil who wants to control our bodies and our consciousness. Fortunately for us, they are no more than men-they are powerful, but they are few and they depend on assent through a combination of fear and guilt. The fear is of bodily violence, the guilt is of our thoughts. It is the twin evil that makes it so powerful, but we can stop feeling guilty -feeling we owe something to society/God. We can break free of dependence on these witch doctors and hence we no longer face an implacable foe-but one who, on the physical level is as feared of us as we are of them, but we are greater and that's why they seek to get us to fight amongst ourselves. We only need to see who our tormentor is and turn against them.

J J Pettigrew's picture

College debt will be forgiven......

next is Treasury debt...

chubbar's picture

That's all well and good (not really but for the purposes of this discussion), but the over indebtedness is at the consumer level, the gov't has never slowed it's spending yet the economy is slowing WAY down, which exacerbates that problem at the consumer level with lost jobs, etc. Forgiving debt that isn't being repaid doesn't free up any more money to be spent at the consumer level which is 2/3rds of our economy, IIRC. The former students aren't making that much money anyway so how much MORE consumer spending will occur should that debt be forgiven?

Erasing Treasury debt, not sure how that could be done, also doesn't free up consumer debt unless I'm missing something. Again, the gov't is still spending in excess of a trillion/year over what they collect through taxation. That money flows out into the economy and is responsible for some % of the reported GDP. Should that spending ever go away for whatever reason, it will decimate the economy.

 

jamesmmu's picture
Discussing The Recovery™ and Financialization With Alan Greenspan and the Limited Liability Establishment

http://investmentwatchblog.com/discussing-the-recovery-and-financializat...

Lparadise's picture

Along the same lines: analysis about US stocks, growth and monetary policy

https://www.smartkarma.com/insights/us-equity-market-looking-increasingl...

 

 

Darth Rayne's picture

The article mentions the word 'money', often.
The correct term is 'bank credit'.

All 'bank credit' belongs to the banks and we simply borrow it. This simple truth leads us into a level of understanding that few people ever achieve.

http://davidwatkinson.blogspot.co.uk
Three blogs and three books.

Velocity of bank credit will slow as the banks owners quietly buy more and more productive assets. Ulimately, the banks owners will own the planet.

The concept is straightforward enough. Understanding it is easy. Believing it is virtually impossible. I strongly recommend you educate yourselves properly. My books are a great start. They are free, often. You are welcome. Details on the blog, the link is as above.

You take care

Darth Rayne's picture

Bank credit is created at the instant a loan is approved, at zero cost.

Once that loan is repaid. The bank credits no longer exist.

Once that is understood, we need no longer talk of money.

Coins are bank credit tokens.

Notes are bank credit vouchers.

Our bank accounts show bank credit balances

Our pensions show a number that, in theory, can be transferred into our bank balances.

We have been 'educated' to view bank credits as money. I hope I have managed to un-educate you.

 

 

Darth Rayne's picture

QE helps transfer pension balances into bank balances at a one for one exchange rate.

QE delays the time when this one for one exchange rate fails.

Understanding QE reduces its efficacy, dramatically.

illuminatus's picture

the way this ends is with central banks and the bankster elite in general owning everything and everyone.

Sudden Debt's picture

It end pretty silly actually.

All you need is a little bit of European monetary history.

They'll inflate the currency by 90% overnight, prices will rise 900% and we're good for the next 4 years.

a war would be good to destroy a lot of shit....

and if there's no war, they'll inflate it again 4 years later.

and then we pray for the best.... or go to war anyway.

 

It happened about a hundred times already.

The only difference now is that back in the day, silver was key... 

so who knows what will happen now. Inflation by 9000%?

Inflation isn't bad if you have assets. It's those that don't have any who lose it all.

fattail's picture

In the past the poor were fooled by their sense of nationalism, patriotism, tribalism, or religon into becoming cannon fodder for the ruling elite.  I have hope that to many millenials have access to too much information and won't be fooled again.  

 

Lparadise's picture

Another interesting article re. who's telling the truth - stocks or bonds?

https://www.smartkarma.com/insights/us-macro-bonds-pointing-down-equitie...

 

Last of the Middle Class's picture

Debt is the precious metal minted and traded for control of your government by the corporatists and it has made them very very wealthy and unbelievably powerful. Hell, just watch CNN for 5 minutes if you can bear it.

TheSilentMajority's picture

The simple solution already being implemented is the economic "growth" via immigration growth ponzi scheme.

Debt problem solved.

chubbar's picture

Well, it's true that is what they are trying, but it certainly isn't going to solve the issue. It may extend the default a bit, but it isn't going to solve the issue. If anything it just will exacerbate other social issues to where the debt issue is moot.

J J Pettigrew's picture

Japan went to ZIRP in 2000.......and we (the Fed) went to ZIRP in 2008......

they are out there in front of us .... and we can see the failure.....but we follow anyhow.

Paul Krugman's idea......is he still short the stock market (Trump's win)?

Batman11's picture

There is debt and there is debt.

We just forgot what productive lending looks like.

You run up debt by lending productively into business and industry.

You don't use debt for blowing asset price bubbles in housing and other financial speculation. 

Productive lending into business and industry generates the money to pay the debt back.

Bankers find speculation and blowing bubbles easier and they prefer it, but it goes nowhere in the end.

 

chubbar's picture

You need to follow the bread crumbs a little more closely. What happens when housing prices keep rising for instance? More folks go into selling real estate, building, construction trades, paint manufacturing, wood plants, etc, etc. Those are businesses that are created because of mal-investment, but they are businesses nonetheless and most will require loans. So this is all intertwined and done purposefully. Those businesses do pay loans back but only while the ponzi of debt money is still operating and pushing up home prices. Of course if incomes don't rise, interest rates have to fall, then loans have to be less restrictive, then other schemes need to be introduced to keep the ponzi going. However, eventually you are either given the money to buy a house which has other knock on effects or the scheme collapses. That is what we are fast approaching. We are going to see another scheme introduced shortly and then either collapse of prices or of the currency at some point in the future,imo.

hooligan2009's picture

uh huh.. but the government and states are issuing debt to pay for entitlements, pure and simple (since they continue to use "dumb boots" rather than "smart bombs" and reduce the pentagon budget by 3/4).

DonGenaro's picture

that's easy: economic collapse, followed by mass starvation

GodHelpAmerica's picture

The US doesn't just "end up like Japan..." The US has the world reserve currency, and this privledge will assuredly be lost if these trends continue. And when that happens, the value of the currency will normalize relative to the value of the debt. This would be disastrous to most Americans over the short run...

yogibear's picture

Who do think engineered the Bank of Japan's economic policy?

Answer,  US Federal Reserve.

Expect similar results.

Batman11's picture

Interesting.

Where did you find that out?

Centerist's picture

The author's points about debt generation and ensuing panic being ameliorated by the gold rush and then the railroads are good points.  What he leaves out, though, is that that debt was pruvate debt held in narrow sectors.  Today's debt is broadly distributed and on a much more massive scale.

ZH'ers already know about the reinflating housing bubble, student debt bubble, auto loan bubble and general credit card bubbles, so I don't need to go into much more detail about that.  But the consequences of these debt bubbles is that broader swaths of the banking system will be crushed as these implode.  None of this debt is leading to real growth.  It is just compounding existing faults in the system.

The author mentions velocity of money.  That is only a measure of how much and how quickly money changes hands.  If I pay my neighbor to mow my lawn, and he pays me to mow his, then we have money velocity, but there is really no net increase in our economy's scale as a result of that type of transaction.  And this is where we have run into trouble.  Economists at The Fed have been conflating velocity of money with economic growth.

In truth, people need to consume less.  The credit has been driving more consumption than the real economy should be generating.  From there, production will have to decrease.  Let equilibrium reestablish itself so that people's existing assets will purchase more.  But that all hinges on the masses choosing to do the right thing.

No one holds guns to their heads, but they'll run up all kinds of credit card and store debt to get their latest-model flat-screen TVs and iPhones and buy new cars on 7-year loans and too-big houses on 30-year mortgages with no downpayments.  But as long as they do it, they'll collectively contribute to the inflated prices and set themselves up for bankruptcy, at which point they'll bitch about how the evil corporations and the rich screwed them over, once again.  They refuse to acknowledge that by taking on debt that they didn't have to take on to get frivolous crap and not repaying it that they are the thieves.

And then there us the government side.  They use debt to give failing enterprises run by the fast-talking Elon Musks of the world, bail out crap companies like Chrappler and Government Motors, as well as bail out certain banks and insurance companies.  And then they generate debt to run the broken Social Security and MEDICARE Ponzi schemes--programs that cost many times more than anything spent on providing free security to other countries too cheap to maintain their own fully-functioning militaries.  

And the people want more of it, thinking that they can get it if someone else--those "evil rich people" foot the bill.  But the rich people and corporations they revile don't have enough to pay for all of the free shit they want, ao they're okay with the government going into more debt.

The only thing that will solve this is a really grown-up conversation with the increasingly-adolescent masses and leadership that is willing to make the hard right choices and follow through with them.

 

Anarchyteez's picture

In a world where at all times there is more debt than money in circulation, and the necessity to contantly increase it to pay back all the interest, these conversations examining the insanity happen.

Damn Fractional Reserve!

Centerist's picture

And damn "too big to fail."  That just encourages fractional reserve recklessness.

indygo55's picture

Its in their interest to keep the masses adolescent and the leaders unwilling to make hard choices. It is about borrowing from OUR future to benefit THEIR present lives. They are creating "money" to buy real assets of any and all kinds so they can rent to us, the little people, the masses, the 99%. They keep us docile and uninformed by controlling the media with complicit mouthpieces. The internet has broken the silence and there are huge numbers of people waking up to this historic fraud. 

There will be incidents that will further outrage and awaken the masses. Seth Rich is just such an incident. The cover-up is so obvious that it is rapidly becoming a catalyzing moment. 

Centerist's picture

The irony is that the more the masses become enraged, the more that they vote for the same kinds of people who have tried to make everyone dependent upon handouts.

Becoming aware is half of the equation.  Being able to look in the mirror and make personal changes is the other half.

RozKo's picture

The only thing that will solve this is a really grown-up conversation with the increasingly-adolescent masses and leadership that is willing to make the hard right choices and follow through with them.

 The only thing that will solve this is a massive world war where millions will die and the survivors will realize that having new shiny stuff really doesn't matter in the end....There, fixed it for you.

Centerist's picture

Nothing fixes people's outlooks better than a crisis.

hooligan2009's picture

agree with what you say.

tough to find signs of breaks in the damn of delinquencies and defaults from most potential sources that might spring a leak.

the banks seem to be experiencing lower delinquency rates here (the usury of credi card comapnies charging 15% rates when he default rate is only 2% is staggering).

https://www.federalreserve.gov/releases/chargeoff/delallsa.htm

banks being sound maybe a dangerous assumption to make because all the bad loans issued by banks to people that are increasingly (lay offs will be the cause of the next depression) being laid off because of the tax/labor abitrage, base erosion and profit shifting of the likes of amazn, apple, google starbucks, msft et al

the problem of unsupportable debt levels looks o have been "cured" at banks, which leaves the non-bank lenders (students, cars, houses and pay day loans)

digging around a little on delinwuencies, for

1. student loans you can see here which states and schools default on student loans.

https://studentloans.net/default-rates/

for example, 48% of students with loans attending Barber College in Illinois have defaulted on student loans. Similarly one third of students in the Cosmo Beauty Academy in California. Overall, 11% of all stdent debt is in default.

2. FHA approved delinquencies (essentially lending to those that can't afford houses by gthe Government) here

https://www.spartareport.com/2016/06/fha-loan-performance-default-rates-...

in February 2015, out of 7.76 million loans 12.6% were delinquent in varying degrees - dropped to 6% (bi annual write off's by the FHA will bounce back to 13% this year?)

3. car loan default rates look pretty stable at just 1%, people seem to be smart about that - car companies, not so muc

http://us.spindices.com/indices/specialty/sp-experian-auto-default-index

4. pay-day loans - to quote from Wikipedia "The Center for Responsible Lending found that almost half of payday loan borrowers will default on their loan within the first two years"

https://en.wikipedia.org/wiki/Payday_loans_in_the_United_States

hard to beleive the "officiial" numbers (only 50 billion?) since i doubt profits are even taxed, reported or regulated in any way. (2012 stuff here https://www.fdic.gov/householdsurvey/2012_unbankedreport.pdf )

the next depressin will be because tax cheats (PLUS ROBOTS?) hollow out companies paying taxes leading to sharp falls in aggregate demand, economic collapse and government, state, muni and personal defaults.