Economics
Debt is a major source of money creation in modern economies. Some economists, especially the Austrian school believe that fractional reserve banking should not be allowed and banks should not be allowed to lend money deposited in their accounts by individuals, unless they approve so. Money creation should either be banned (Austrian school) or be a government privilege.
Fluctuations in debt levels are the same as fluctuation in optimism (boom) and pessimism (bust). The middle path is to be advocated at the individual or collective level. In boom times, the debt/GDP ratio rises, this prepares tough times ahead, as sooner or later people are bound to realise that the reality does not match their irrealistic expectations, then they collectively stop to lend and borrow, bankruptcies and debt deflation follow.
Read more about this topic: Criticism Of Debt
Famous quotes containing the word economics:
“There is no such thing as a free lunch.”
—Anonymous.
An axiom from economics popular in the 1960s, the words have no known source, though have been dated to the 1840s, when they were used in saloons where snacks were offered to customers. Ascribed to an Italian immigrant outside Grand Central Station, New York, in Alistair Cooke’s America (epilogue, 1973)
“I am not prepared to accept the economics of a housewife.”
—Jacques Chirac (b. 1932)
“Religion and art spring from the same root and are close kin. Economics and art are strangers.”
—Willa Cather (1876–1947)