There are two quite different perspectives in the set of speeches at this conference. Many on our morning panels – Steve Keen, William Greider, and earlier Yves Smith and Robert Kuttner – have warned about the economy being strapped by debt. The debt we are talking about is private-sector debt. But most officials this afternoon focus on government debt and budget deficits as the problem – especially social spending such as Social Security, not bailouts to the banks and Federal Reserve credit to re-inflate prices for real estate, stocks and bonds.
To us this morning, government deficit spending into the economy is the solution. The problem is private debt. And in contrast to Federal Reserve and Treasury bailout policy, we view the problem not as real estate prices too low to cover bank reserves. The problem is the carrying charges on this private debt, and the fact that debt service is eating into personal income – and also business income – to deflate the economy.Michael Hudson
Government Debt and Deficits Are Not the Problem. Private Debt Is.
2 comments:
That was the clearest, most concise statement I've seen from Hudson in years.
I agree with the comment by David; Michael Hudson does an excellent job of explaining the President's (advisers') false policy perspectives. Surely, most people recognize that today's politicians are little more than outspoken shills for the financial/ banking sector interests.
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