peak debt

A champion of savings over spending

Posted February 20, 2009 - 06:36 by Philip Brewer

Frugal Living, Consumer Affairs

We're subjected to constant barrage of unhelpful advice to the effect that what the economy needs is more spending. (The stimulus program is one piece of this.) It's kind of understandable: A recession is all about the downward spiral of people buying less, forcing businesses to shrink, putting people out of work, so that they spend even less. The cure, though, is not just a bunch of extra spending. The cure is to get the economy to the right size.

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Peak Debt

Posted September 19, 2008 - 01:13 by Philip Brewer

Personal Finance

Going out of business sign

Is there a limit to how much Americans can spend? Clearly there is: All they earn, minus savings and service on their existing debt, plus new borrowing. Since the Bureau of Economic Analysis puts numbers on those very items, it's possible to see just how close we are to the edge. In a fascinating paper, Ron Laszewski does exactly that. The results are rather depressing.

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