Comments on: Stop the madness now! http://www.creditwritedowns.com/2009/11/stop-the-madness-now.html Finance, Economics and Markets Wed, 08 Feb 2012 14:57:04 +0000 hourly 1 By: Anonymous http://www.creditwritedowns.com/2009/11/stop-the-madness-now.html#comment-57652 Anonymous Sun, 22 Nov 2009 21:49:00 +0000 http://www.creditwritedowns.com/2009/11/stop-the-madness-now.html#comment-57652 I have posted this question in Naked Capitalism but as there are dozens of questions I guess I have more chances to get an answer herei Even if private debt is purged and reaches a more reasonable level within 5 years thanks to a significant increase of private savings, how will you then start to reduce fiscal deficit without restarting the "private debt - credit economy" rationale? You suggest that deleveraging private debt and purging malinvestment would allow the resetting and restarting of the machine, but in a globalized economy where developped countries are all playing the game of unit labour cost deflation, how will you then increase aggregated demand in the middle and long term without increasing the household debt/GDP rate? I have posted this question in Naked Capitalism but as there are dozens of questions I guess I have more chances to get an answer herei

Even if private debt is purged and reaches a more reasonable level within 5 years thanks to a significant increase of private savings, how will you then start to reduce fiscal deficit without restarting the “private debt – credit economy” rationale?

You suggest that deleveraging private debt and purging malinvestment would allow the resetting and restarting of the machine, but in a globalized economy where developped countries are all playing the game of unit labour cost deflation, how will you then increase aggregated demand in the middle and long term without increasing the household debt/GDP rate?

]]> By: Edward Harrison http://www.creditwritedowns.com/2009/11/stop-the-madness-now.html#comment-57646 Edward Harrison Sat, 21 Nov 2009 20:53:00 +0000 http://www.creditwritedowns.com/2009/11/stop-the-madness-now.html#comment-57646 That's not a question I can answer. The real question is when do we get a self-sustaining recovery i.e. no more need for deleveraging or purge of malinvestment. That’s not a question I can answer. The real question is when do we get a self-sustaining recovery i.e. no more need for deleveraging or purge of malinvestment.

]]> By: V http://www.creditwritedowns.com/2009/11/stop-the-madness-now.html#comment-57645 V Sat, 21 Nov 2009 10:48:00 +0000 http://www.creditwritedowns.com/2009/11/stop-the-madness-now.html#comment-57645 What level of public sector debt (as % of GDP) would you let the economy reach? What level of public sector debt (as % of GDP) would you let the economy reach?

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