Forward Consumption
19/05/16 19:27
One way to view debt is the that it brings consumption forward in time. Basically, debt allows you to buy something now, that you don’t have the ability to pay for at the present.
So, it we have reached peak debt, that means no more consumption can be brought forward. How much of the past economic growth was driven by bringing consumption forward (witness rising debt levels) versus how much was being driven by productivity growth, and perhaps population growth.
With productivity growth at zero, and population growth at steady state, or worst case, perhaps a slight decline, what does all of the above portend for future economic growth?
So, it we have reached peak debt, that means no more consumption can be brought forward. How much of the past economic growth was driven by bringing consumption forward (witness rising debt levels) versus how much was being driven by productivity growth, and perhaps population growth.
With productivity growth at zero, and population growth at steady state, or worst case, perhaps a slight decline, what does all of the above portend for future economic growth?
