Long but interesting article in Independent on debt

notanothergreyhair

Kevicho wrote:

Thats the quote for me in that piece, interesting read, but nothing really new

Agreed. It may not be new to you and all our fellow MSE members but it might be to someone out there. Each and every single person who has that LBM, as we so affectionately term it, has achieved something massive.

ZTD

Pobby wrote:

Something intangible has happened and I find it hard to put my finger on it.

In an economy with a debt and an interest rate - whether a national economy or a family "economy" - the ecomomy must produce a surplus over expenditure - a profit - in order to service that debt. The profit must be larger than the interest charged. The day it isn't, no bell rings, no lamp lights up, but the road to Hell has started.

From the bankruptcy and other stories that are on here - the more sensitive souls had a feeling of unease (but no bells rang for them either) when they could not service their own debt out of their wages - but they still managed to rob Peter to pay Paul and service it from new credit until very late on in the game. When they could not serivce their debt from their ability to raise credit - that's when the bell rang - but of course it was way too late by then.

That's what's happened to us as a country - we are now servicing our debt from new debt, not from national income.