Debt Inequality and Crisis

[@djangogeek]

This is brilliant! 7:24 effects of private debt 14:40 Minsky simulation of loanable funds model 17:26 Minsky simulation of credit creation model 30:32 Boom Bust aftermath scenarios 31:58 Minsky simulation of financial instability model 33:50 3 equations for 3 basic statements

[@roryduff2252]

Thanks for sharing that. You have a really important message for everyone here I just wish you had over a million views on this and hope very much you will soon as your conclusions offer us all a wonderful positive way forward.

[@analyticalace6138]

From what I've seen, income inequality is optimal when interest rates are about 5%. Right now, it's 1% or less. Way too much investment, not nearly enough consumption for a healthy growing economy. It appears as though the era of low interest rates is going to come to an end shortly as the next generational shift occurs, forcing income that would be going to wealthy investment and moving it to needy consumption. GDP may or may not increase to fill the gap with potential GDP (it's been lagging for almost a decade), but living standards will greatly increase (production and distribution may be more efficient). Income inequality, interest rates, inflation, and generational cycles/ideology are very closely related. Size of finance industry vs size of government is also closely related.

[@christopherhussey6831]

I think it is a mistake to concentrate exclusively on monetary policy - to be a one trick pony. I reckon that it is the rise in land ( site ) values - due to the limited amount of land - that in turn causes the level of private debt to rise exponentially and so on as you so brilliantly analyse and describe. My idea of a jubilee would then involve the principle that no one should be required to pay more than the market price for their property (land and building) - so the debt should be written down to the post slump reduced price BUT equally that they should never pay (much) less than the market price of land element in taxation to the exchequer for ever and ever. the full taxation of land would drive the price of land to near zero and that would put a very very definite stop to the gallop upwards of private debt for firms and households. banks would then be lending mostly for buying capital . that said I am massively enthused by your lectures. thank you hugely.

[@interactparty6629]

So obvious that persons relying on credit will eventually collectively reach a ceiling where no more credit can be taken on. My worry now is that since all are maxed out on debt ... here come the interest rate raises which really will finish them off. Will we see debt write-downs as we should do considering that the nature of debt is nothing more than created credit from keystrokes or the birth of new money in the system. Nothing wrong with debt creation if it can be written down as it cannot be paid off by the individuals who have been granted credit. Debt is money. Credit is debt.

[@paulwalton5383]

I admire your work, so much. However, I wish you would accent the social justice aspect. I would love you and Michael Hudson to establish the 'Social Wealth and Global Democracy' Party............ or, perhaps, I should?!