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Debt is a distributional issue. It nets down to zero as for each debtor there must be a creditor.

So Debt Deflation can't happen?

George Monbiot Seminar | Steve Keen's Debtwatch

I tried to point out that since the rate of change of debt contributes to aggregate demand (for both newly produced goods & services, and existing assets), then the change in debt matters, but I made no headway at all with the argument.

by generic on Sun Oct 30th, 2011 at 02:40:56 PM EST
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I'm not saying that. I'm saying that if (yes, a completely unrealistic if in the current climate) we were to decide to tax the creditor and credit the debtor it could be repaid. You could still then have the same rate of change of debt -but you'd be starting from a level of 0.

Of course, it would be far better to couple that with a fairer distribution going forward (which probably requires taxation as you'll find it very hard to prevent the commercial roles from taking a big bite). In effect, you'd be replacing change in the debt level by redistribution in order to get money in the hands of those likely to spend it.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Sun Oct 30th, 2011 at 03:18:56 PM EST
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Basically a jubilee? Sounds good.
by generic on Sun Oct 30th, 2011 at 04:09:44 PM EST
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Debt nets down to zero but what matters is the size of the balance sheets which comes from gross debt.

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis
by Migeru (migeru at eurotrib dot com) on Thu Nov 3rd, 2011 at 05:02:36 AM EST
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