Taps Coogan – September 20th, 2020

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Daniel Lacalle, Chief Economist at Tressis Gestión and author of several books including ‘Escape from the Central Bank Trap‘ and ‘Freedom or Equality,’ recently spoke with NTD News to explain why more debt won’t fix our long term debt solvency problem.

It all boils down to this: the slow economic growth of developed economies over the past decade is due to stagnant profitability, poor capital allocation choices, and structural impediments to growth, not the lack of cheap credit. Adding more debt to get through Covid may bridge parts of the economy through the crisis, but in doing so, the added debt burden simply makes the preexisting problems worse and dis-incentivizes the structural solutions to the underlying problems.

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