In a world where Austrian School precepts held sway, the dog would be allowed to exhaust itself and start out fresh, facing less-distorted relative price signals that eventually would lead to a more productive set of behaviors. Debts that could not be supported…
July 29th, 2009 | Rob Parenteau | 0 comments | ContinuedAll Posts Tagged With: "economic activity"
Unsustainable Economic Activity
Consumer borrowing and government budget deficits both pull what would have been future economic activity into the present, while pushing the associated costs into the future. When this unsustainable behavior reaches its point of exhaustion, and people finally realize the folly of it all, employment falls, reckless investments are liquidated, and bad debts default.
June 26th, 2009 | Dan Amoss | 0 comments | Continued