me: > Of course, there are limits to how much debt working people can accumulate, > so this will eventually stop. In other words, Bosworth may be correct right > now, but the problem has been shoved into the future.
CB: > How would one go about estimating what these limits are and when they > might be reached ? it's really hard to find the limit. It's a bit like a bubble, where you don't know when it's going to end until it's already ended. > If there is no limit to this borrowing, doesn't "the" working class have a > higher income in effect ? It's a "raise" in terms of consumption plus interest payments, but not in terms of income. As interest payments get larger and larger, as they do (ceteris paribus) as consumer debt rises, then this raise isn't seen in consumption. (Interest payments can also rise due to rising interest rates (held constant in the previous sentence) arising from monetary policy and the like. It has the same effect.) > I mean to the extent that the debts are written off because they can't be > paid, or interest is not all paid, it would be a raise (sorry). in the real world of capitalism, if you don't pay the interest or other debt service, you get punished. Poor countries in Africa are told that they can escape this, but only in exchange for obeying the IMF, etc. In theory, we could have a real "Jubilee" but the political balance isn't right. -- Jim Devine "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante.
