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.
- 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.
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.”