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The Household Debt Fallacy is a specialization of the Fallacy of Composition. 1) The debt is eclipsed by GDP rise over time. 2) A government ( at least used t
by ArkyBeagle 10y ago
The Household Debt Fallacy is a specialization of the Fallacy of Composition.
1) The debt is eclipsed by GDP rise over time.
2) A government ( at least used to ) be able to very slightly weaken its currency to equalize for GDP and population growth.
3) Mild inflation acts to equalize the effects of private debt as well.
I use the metabolic analogy because the risks of no body fat and low body fat are quite different, much as the risks of mild inflation and no inflation - or more accurately, deflation - are quite different.