On Mon, 2009-05-18 at 13:16 -0400, Doug Henwood wrote: > On May 18, 2009, at 1:10 PM, raghu wrote: > > > On Mon, May 18, 2009 at 8:18 AM, Doug Henwood <[email protected]> > > wrote: > >> What we do today does have an effect on our descendants. > > > > > > Yes, but not through the mechanism of bonds. Bonds represent > > redistribution of wealth between classes not between generations, no? > > Like I said in the part you don't quote, the level of debt that we > contract will matter to our descendants. A debt burden of 60% of GDP > with debt service at 2% is a lot different from a debt burden of 120% > with debt service at 6%.
As usual when reasoning on "debt" it's misleading to talk only about the public debt without looking at household and business debt too. I hope economists and media will learn from the current crisis which has long gone unoticed because no one ever report household debt which in the USA has reached more than 100% of GDP starting from 40% a few decades ago. And the household debt "burden" is far higher for the same nominal amount than for public debt because of interest rate spreads. Laurent _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
