Friday, December 2, 2011

Michael Hudson, historian

Recommended reading: Debt and Democracy: Has the Link been Broken? by Michael Hudson, at NEP.


Jazzbumpa said...

Wow -

Great article. Actually coalesces your POV with mine.

Salient question by Blissex in comments:

The very big question here is the cause of this. Why ever does debt grow faster than ability to pay?

Exactly so - which is why I think debt is a symptom or barometer, rather than the root cause.


WV: monyvall. Makes ya wonder . . .

The Arthurian said...

I can live with that. Of course, there is the cost of debt. But mainly what I show is how to evaluate policy: If we are doing the right things, DPD will fall.

Exactly as it did under FDR.

Jazzbumpa said...

What you need to demonstrate is how DPD is a better metric than Debt/GDP, debt/Income, or debt in any other relevant context.

What factors influence this metric?

What resultants depend on this metric?

How, then, does this metric inform policy decisions?

In short, what do we learn from it that is uniquely illuminating?

Otherwise, it's just a curiosity.


Clonal said...

Jazz and Art,

You have to read Hudson's two Part article - The Mathematical Economics of Compound Rates of Interest: A Four-Thousand Year Overview

Part - I
Part - II

Also Why the “Miracle of Compound Interest” leads to Financial Crises