A Jubilee is Coming, by Robert Gore

STRAIGHT LINE LOGIC

The greatest debt expansion in history draws to a close.

Conventionally measured economic growth is related to two aspects of debt: its growth rate and its marginal effectiveness. In terms of economic growth, debt should be thought of as a factor affecting production, like the supply and cost of labor, capital goods, and land. A business can increase the supply of whatever goods or services it produces by borrowing money. Whether it does so depends on the cost of debt service versus the expected return from the expansion. As long as the latter is greater than the former, the business should add debt and expand. This analysis applies to an economy as a whole: debt should increase as long as the return from debt is greater than its cost.

The more debt an entity incurs, the less productive each additional unit of debt becomes—diminishing marginal returns. For the global economy…

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Author: Lisa the Infidel

I am an #Infidel - born and bred North Carolina.

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