Steve Keen on a Double Dip and Private Debt
Australian Professor Steve Keen explains why private sector debt dynamics drove both the Great Depression and the Great Recession.
There are four ways to reduce real debt burdens:
- by paying down debts via accumulated savings.
- by inflating away the value of money.
- by reneging in part or full on the promise to repay by defaulting
- by reneging in part on the promise to repay through debt forgiveness
While we should hope to pay down debts via accumulated net private sector savings, expect the other three debt reduction methods to be a big factor.
Videos below.
Also see What is a double dip recession? which explains “a double dip recession is rooted in a sense that the underlying causes of the first and second dip are the same.”
His thought that the US will have a quadruple dip is close to my thought that this will be a L shaped recovery. There is too much private debt out there to be dealt with easily.
I agree with Keen:”When debt is the real issue underlying an economic downturn, the result is a period of stagnation and short business cycles as we have seen in Japan over the last two decades. This is what a modern-day depression looks like – a series of W’s where uneven economic growth is punctuated by fits of recession.”https://pro.creditwritedowns.com/2009/10/the-recession-is-over-but-the-depression-has-just-begun.html
His thought that the US will have a quadruple dip is close to my thought that this will be a L shaped recovery. There is too much private debt out there to be dealt with easily.
I agree with Keen:”When debt is the real issue underlying an economic downturn, the result is a period of stagnation and short business cycles as we have seen in Japan over the last two decades. This is what a modern-day depression looks like – a series of W’s where uneven economic growth is punctuated by fits of recession.”https://pro.creditwritedowns.com/2009/10/the-recession-is-over-but-the-depression-has-just-begun.html