Friday, September 19, 2008

Prescient Economist

Debt and Doom? (Dec 2003)

James Dean once put it pithily. “Dream as if you’ll live forever. Live as if you’ll die today”. Britain’s consumers have been behaving in a way that JD would like. They have been out there spending away like billy-o. Saving for tomorrow is largely out; expenditure for today is in. For example, on some measures, borrowing through extra mortgages and remortgaging is at all-time highs. I worry about this. A natural question is: could the remarkable debt levels in Britain lead bit-by-bit to a serious economic crash? It is impossible to say for sure. But I think the answer is yes. It is sensible to face the possibility that the decade might bring a nasty economic downturn caused by a domino-like spiral in confidence.

Posted by another alan @ 02:14 PM (610 views)
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