More Debt

No. 31

According to a recent report from the Centre for Economic Policy Research (CEPR), the ratio of global debt, excluding financial institutions, now stands about 210% of global GDP, up from 175% on the eve of the financial crisis. The CEPR report's title, "Deleveraging? What Deleveraging?" captures its key finding. It could have also been, "What, me worry?"  How daja vu.

Here is what President Hoover's Treasury Secretary, Andrew Mellon, advocated: 

"Liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate... it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people."