Re: Malpass' WSJ comments re personal savings

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Posted by Warren Mosler (65.113.90.18) on 17:17:28 04/09/05

In Reply to: Re: Malpass' WSJ comments re personal savings posted by Winslow R.

: The government, so far has been minimally "responsible", by keeping the "PLAYERS" credit worthy by providing them with sufficient income to pay SOME of the interest on their debts. Though the principal and most of the interest is never paid back, the system can continue to function.
:
: Has anyone calculated the break point? The point where income from government is insufficient to cover a sufficient amount of the interest payment that lenders quit lending?

Hard to calculate. Things like the Fed's financial burdens ratio is a pretty good guide.
I thought it was all over in late 98 but consumers continued to increase debt at 6% of gdp for another two years due to a lot of extraneous factors.

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Subject:	Re: Malpass' WSJ comments re personal savings
Comments:	: : : The government, so far has been minimally "responsible", by keeping the "PLAYERS" credit worthy by providing them with sufficient income to pay SOME of the interest on their debts. Though the principal and most of the interest is never paid back, the system can continue to function. : : : : Has anyone calculated the break point? The point where income from government is insufficient to cover a sufficient amount of the interest payment that lenders quit lending? : : Hard to calculate. Things like the Fed's financial burdens ratio is a pretty good guide. : I thought it was all over in late 98 but consumers continued to increase debt at 6% of gdp for another two years due to a lot of extraneous factors. : : : : : :
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