The problem of debt overhang has not been fixed. Nobody has really tried—neither Presidents Obama and Trump, the Democratic and Republican leaders in Congress or the supposedly nonpartisan Federal Reserve Board.
Elizabeth Warren wrote a good article about how another recession is on the way, and it will be as bad as the previous one because U.S. policymakers didn’t learn the lessons of 2008.
The economic cycle of growth and recession seems to be inherent in a capitalist economy that uses financial markets. There are many theories as to why this should be so.
But the 2008 recession was much worse than the ones that came before because the economic expansion was based on debt that could not be repaid. I give myself credit for foreseeing this.
My foresight, however, was of little value because I could not foresee when the crash would come. When it happened, it was as big a surprise to me as it was to everybody else I knew.
The problem of debt overhang has not been fixed. Nobody has really tried—neither Presidents Obama…
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