Steve Keen — Why the US can't escape Minsky

So the US hasn’t escaped Minsky -- it can’t. Minsky’s message is for the whole financial cycle, not just the moment when it turns nasty. At the moment, we’re in the nice phase of Minsky’s cycle, when it pays to lever. Leverage is clearly on the rise...

At some point this virtuous phase will give way to vice, when what Minsky called “euphoric expectations” take over as the memory of the GFC fades, and the resulting boom will prepare the grounds for the next bust....

That is likely to happen sooner rather than later, because yet another of Minsky’s economic intuitions is strongly confirmed by the data: each Minsky cycle tends to start from a higher level of debt than the preceding one, making the economy more fragile. This new Minsky cycle is commencing from a debt to GDP level more than one third higher than the previous one that began in 1994 and crashed in 2007 (see Figure 3). It certainly won’t be 17 years before the next Minsky moment.

Business Spectator
Why the US can't escape Minsky
Steve Keen

See also Lenders Are Taking More Risk at House of Debt by Atif Mian and Amir Sufi.