De groeiende schuldenberg maakt dat herstel na een economische crisis langzamer gaat dan ooit, en heeft tot gevolg dat we ons van crisis naar crisis slepen. Daniel Lacalle legt uit waarom dat zo uitpakt.

The pace of global recoveries since 1975 has been slower and weaker, consistently evey time, according to the OECD. Recoveries take longer and happen slower. At the same time, periods of crisis are less aggressive albeit more frequent than prior to 1975.  Another interesting evidence of the crises and recoveries since 1975 is that almost all economies end the recession period with more debt than before.

Global debt has ballooned to all-time highs, more than three times the world GDP. For the economy to really recover, we must stop the race of perverse incentives created by the wrong analysis of the origin of crises and the solutions that are often proposed in mainstream economics and politics.  I agree with Johan Norberg that the two main factors that have driven the phenomenal progress we have seen are free markets and openness. The freedom to innovate, experiment, create and share must come with the right incentives.

For decades, governments and central banks have always identified the problems of the economy as demand problems, even if it was not the case. If there was a crisis or a recession, governments immediately believed that it must be due to lack of demand, and subsequently decide that the private sector is not willing or able to fulfill the real demand needs of the economy, even if there was no real evidence that companies or citizens were investing or consuming less than what they needed. The entire premise was that companies were not investing “enough”. Compared to what and decide by whom? Obviously by central planners who benefit from bubbles and overcapacity but never suffer the consequences.

Governments and central banks never perceive risks of excess supply and even less predict a bubble. Why? Because most central planners see debt, oversupply, and bubbles as small collateral damages of a greater good: recover growth at any cost.

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Duur: 3:08 min.

Publicatie 21 februari

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