In Debt We Trust
September 20, 2009 11:30 PM Subscribe
A government stimulus can overwhelm the impact of a credit crunch, and the innate dynamic of a productive economy can re-assert itself after such a crisis, leading to renewed growth. But this not merely a crisis of liquidity. It is one of excessive private debt, on a scale that is also unprecedented.
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Economist Steve Keen
on the global debt bubble
Keen has long been concerned about the rise of household debt
in the global economy, but he is not alone: although American consumers are now saving as never before, and in a way that worries some economists
(see for instance the issue of "debt overhang"
), personal debt remains historically high by almost any measure: Collectively, U.S. household debt rose to a high of 133% of after-tax income in 2007, double the percentage of the mid-1980s, according to Federal Reserve data.
(LA Times, 9-21-09)