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It was not supposed to be this way, but there has not been a mass write down of debt in the wake of the global financial crisis. Contrary to the orthodox economic literature, global borrowing continues to soar to record highs despite stagnant growth. The debt-to-GDP indicators commonly used to measure the risk of mass insolvency and debt default leading to economic collapse have inexorably continued to widen rather than narrow. Alarm at this unanticipated development is expressed in a new report by a blue-ribbon panel of senior economists and former central bankers. The latest Geneva Report issued by the International Centre for Monetary and Banking Studies warns of the impending return on a larger scale of the 2007-08 crisis from which the mass of the world's population has not yet recovered. Entitled "Deleveraging? What Deleveraging?", it cites a "poisonous combination of high and rising global debt and slowing nominal GDP" which has seen total private and public world debt rise from 200% of national income at the depth of the economic downturn in 2009 to 220% year. The report is the subject of two articles today from opposite ends of the political spectrum - the first by the Marxist economist and blogger Michael Roberts; the second by Jeremy Warner, the economics columnist of the conservative Telegraph in Britain. See: http://thenextrecession.wordpress.com/2014/09/30/debt-deleveraging-and-depression/ http://www.telegraph.co.uk/finance/economics/11129108/Mass-default-looms-as-world-sinks-beneath-a-sea-of-debt.html ________________________________________________ Send list submissions to: Marxism@lists.csbs.utah.edu Set your options at: http://lists.csbs.utah.edu/options/marxism/archive%40mail-archive.com
