Ars Regendi Simulation Forum

Full Version: Economy relies on excess debt in order to bootstrap
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Economy relies on excess debt in order to bootstrap, which leads to the business cycle.


Bootstrapping = refers to a self-starting process that is supposed to proceed without external input
(Observation: whether you have a modern capitalist or socialist, feudal, or primitive society, people are going to create & retire debt/credit/IOUs (aka contracts) as part of normal social relations.

Ex ante = before the event, based on forecasts/predictions/expectations

Ex post = after the event, based on actual results

Aggregate Demand = Income + the change in private debt

Note: Spending is Income. All government debt in the world = worldwide private sector financial savings. Together they net to zero. This statement is not based on assumptions and preconditions of a model, but is of trivial arithmetic nature and universal without restrictions.
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