Econintersect: Richard Duncan gives a description of how global bubbles are built. This is a simplified view of the forces behind the growth of credit and debt driving the economy. It is an interesting summary but does have some shortcomings. Perhaps the biggest failing is the failure to make a clear distinction between the function and behavior of private debt and public debt. He mentions that there is no theoretical limit to the size of sovereign debt (for nations with their own sovereign currency, which he never mentions). But he doesn’t address implications of this except to discuss the political resistance to such expansion. One strength of the presentation is the clear connection Duncan makes between the increase in debt and economic growth. Another strength is his discussion of what proper government investment might involve. One weakness is that he refers to bankruptcy for nations with sovereign currency which is a technical impossibility.
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Hat tip to Rob Carter.