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http://www.businessspectator.com.au/...#ixzz2bHo4P2x2
this is an important piece of (slightly old) news for those interested in the views of Steve Keen. it's a pretty long story how he arrives at the new estimate that you can read in the article. but the result is that he new estimates the relevant part of private debt as follows:
Implications that I can think of:
- the "growth down-slowing" private debt is considerably smaller as a proportion of GDP than previously thought; for the US it's now +/- 160% whereas it used to be well over 200%
- the debt level is still higher than during the worst of the great depression and much higher than at its start; remember, the peak in debt-to-GDP at that time occurred after GDP took a major hit
- the ratio between the debt level during the 1929 crash and the 2008 peak is probably largely the same; again, the argument that private debt is "too damn high" is left intact
- interestingly, this makes the rise in PUBLIC debt since 2008 larger compared to the fall in private debt since 2008, thus strengthening the argument that from a total debt point of view, there is no improvement going on. Just debt being shifted from private to public accounts. This is not "deleveraging", just swiping debt under the rug.
this is an important piece of (slightly old) news for those interested in the views of Steve Keen. it's a pretty long story how he arrives at the new estimate that you can read in the article. but the result is that he new estimates the relevant part of private debt as follows:
Implications that I can think of:
- the "growth down-slowing" private debt is considerably smaller as a proportion of GDP than previously thought; for the US it's now +/- 160% whereas it used to be well over 200%
- the debt level is still higher than during the worst of the great depression and much higher than at its start; remember, the peak in debt-to-GDP at that time occurred after GDP took a major hit
- the ratio between the debt level during the 1929 crash and the 2008 peak is probably largely the same; again, the argument that private debt is "too damn high" is left intact
- interestingly, this makes the rise in PUBLIC debt since 2008 larger compared to the fall in private debt since 2008, thus strengthening the argument that from a total debt point of view, there is no improvement going on. Just debt being shifted from private to public accounts. This is not "deleveraging", just swiping debt under the rug.
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