The other day I quoted JSR...
As far as debt goes, leverage was much smaller in 1980
... and Williamson's curt reply...
Depends how you measure private debt, I think.
...which I dismissed with a laugh:
So, like, if we don't count the debt we won't find an overhang, dude!
But it didn't sit right. Maybe Stephen Williamson knows something I don't. So I went back and did a search of his blog for "debt".
Google returned 316 results. Too much. Next I tried "private debt".
36 results. But a lot of them feel like responses to Williamson's posts. I'm looking for Williamson here. So then I tried "measuring private debt".
In quotes? zero results. No quotes? 2 point 9 million results -- and that's just at http://newmonetarism.blogspot.com/. Maybe that was a glitch. But the first of those results, number one on page one, was the same "HP Filters and Potential Output" post we've been looking at recently.
I tried "measure private debt" (in quotes). Google returned exactly one result, the same post we've been looking at. Then I trued measure "private debt". 24 results this time. Things like
The nominal interest rate is essentially a measure of...
You measure talent by the end result.
...the inflation rate is increasing in terms of core measures...
...typical measures of anticipated inflation...
and like that. You can have it. But I did come across this one:
Is the problem too much private debt?
Turns out, that one's from a Williamson comment on his Evans Speaks. Here's what I found:
Is the problem too much private debt? If so, one person's liability is another person's asset. Do we have a suboptimal distribution of wealth, and is the way to correct it then through an unanticipated inflation that redistributes wealth in just the right way? Couldn't we do a better job of redistribution with fiscal policy? Is the problem to do with costly defaults? Again, couldn't we correct the problem with fiscal policy? What about moral hazard? Don't we have to worry about that?
SWilliamson is throwing up a wall, a barrage of questions that he has no intention of evaluating, himself.
And yes, there it is, plain as day, for all to see:
"...one person's liability is another person's asset."
For all to see. Swilliamson, you miss the point. The point is not that there's just as much financial income as there is financial cost. The point is that there's no production -- and no consumption, either -- associated with either financial income or financial cost.