UpInArms
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Thu May-29-08 07:16 AM
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21. The cost of soaring public and private debt levels |
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http://www.marketwatch.com/news/story/cost-soaring-private-public-debt/story.aspx?guid=%7B850A8114%2DC2BE%2D4C36%2DBC01%2DFB07DC75B45F%7DNEW YORK (MarketWatch) -- Is Kevin Phillips right that something funny is going on in the economy? Yes, although just how funny is less clear.
The numbers do suggest he's correct about one thing at least: public and private debt has indeed reached unprecedented levels.
Recently, we described Phillips' thesis, in his new book "Bad Money: Reckless Finance, Failed Politics, and the Global Finance of American Capital" that the U.S. economy has been run by a Washington-Wall Street mercantilist alliance for the benefit of the finance sector. See column.
Phillips doesn't flat-out predict that the resulting distortions will result in a crash. He says it's too early to say. But he meaningfully quotes a number of authorities, such as Yale economist Robert Shiller, to the effect that it will.
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Phillips calls this "The Great American Debt Bubble". He says, somewhat melodramatically, that the financial media haven't been running it recently "Analogies to the 1920s would have been too disturbing."
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