debt Archives - Page 2 of 7 - Fabius Maximus website

NBER: rapidly rising household debt predicts recessions. See America’s future.

By Larry Kummer, Editor / 14 Comments / 2 February 2016 2 February 2016

Summary: Perhaps the most important frontier in microeconomics is the effect of debt on growth, especially private sector debt (government debt has different dynamics). Many economists have attempted to integrate debt levels into mainstream theory (e.g., Hyman Minsky). While so far unsuccessful, research has produced many useful insights. Here is a new study with a …

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Fact & myth about the debt supercycle, a story of modern America

By Larry Kummer, Editor / 16 Comments / 18 January 2016 18 January 2016

Summary: The effects of debt are among the most widely misunderstood factors of macroeconomics. The almost delusional writings of perma-bears and conservatives have demonized debt, while economists often regard high debt levels with complacency. Yet economists have learned much about dynamics of debt. This post looks at this cutting edge of economic theory, very relevant …

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Auto loans: once a boon for America, now a bane

By Larry Kummer, Editor / 19 Comments / 7 August 2014 16 February 2016

Summary: One of the many oddities of this cycle is that many things that were good during the post-WW2 era have become bad in the new era now starting (unrecognizably so, as we remain unaware of our changed circumstances). Like debt. As we see with auto loans, once useful — now malignant. Our use of …

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Debt unleashed again to ravage America: out of control auto lending

By Larry Kummer, Editor / 11 Comments / 2 July 2014 16 February 2016

Summary: Let’s look at the small and large implications of the auto loan boom. It’s an example of our inability to learn, resulting in our credit-driven business cycles. Corporations profit from more sales and interest charges. People suffer from excessive debt burdens, and bankruptcies. Governments run deficits from the eventual busts. So it goes cycle …

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More debate about who predicted the Great Recession, and lessons learned

By Larry Kummer, Editor / 10 Comments / 9 April 2014 1 January 2015

Summary: The comments on the FM website often have Socratic dialogues, clashing views in the search of truth. Yesterday we had one at the intersection of several of our long-standing themes: debt, deflation, economic theory, making forecasts, and the credibility of experts. Participating was the distinguished economist Steve Keen, discussing if he “predicted” the Great …

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