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Debtors will seek to cancel their debts. Creditors will try to collect, and the more they succeed, the more they will impoverish the economy.

Michael Hudson

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Michael Hudson
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More quotes by Michael Hudson

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Governments create money and spend it into the economy by running budget deficits. The paper currency in your pocket is technically a government debt.
Michael Hudson
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Normally, if someone goes bankrupt, you wipe out the debt and get a fresh start. But that's not permitted with student loans. So the effect is to impoverish many graduates with very high debts.
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The one sure mark of a con, though, is the promise of free money.
Michael Hudson
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A derivative is a bet on whether a stock, or a bond or a real estate asset, is going to go up or down. There's a winner and a loser. It's like betting on a horserace.
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As you have to pay more interest and amortization on what you owe, you're left with less and less money to buy goods and services - unless you borrow even more and go further into debt.
Michael Hudson
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The world's politics are in turmoil, not to mention the Mideast, where the US has mounted attacks from Libya to Iraq to Syria, and ISIS is attacking governments in today's pipeline rivalry.
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Most people think of the economy as producing goods and services and paying labor to buy what it produces. But a growing part of the economy in every country has been the Finance, Insurance and Real Estate (FIRE) sector, which comprises the rent and interest paid to the economy's balance sheet of assets by debtors and rent payers.
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The ideological foundation of today's business schools is that economic control should be shifted out of government hands into those of financial managers - that is, Wall Street.
Michael Hudson
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You have a choice. Either you can have more oil, or more clean water. Fracking is not good for the water supply.
Michael Hudson
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When they say inflation is bad, deflation is good, what they mean is, more money for us 1% is good we're all for asset price inflation, we're all for housing prices going up, and we're all for our stock and bonds prices going up. We're just against you workers getting more income.
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The problems of 2008 were never cured. The Federal Reserve's solution to the crisis was to lend the economy enough money to borrow its way out of debt. It thought that if it could subsidize banks lending homeowners enough money to buy houses from people who are defaulting, then the bank balance sheets would end up okay.
Michael Hudson
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What's bad for the frackers usually is good for the rest of the world.
Michael Hudson
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Nobody prefers to earn income any more, because that's taxable. Rich people prefer to make capital gains.
Michael Hudson
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One of the big problems in America's economic polarization and shrinkage is that pensions can't be paid. So there are going to be defaults on pensions here, just like Europeans are insisting in rolling back pensions. You can look at Greece and Argentina as the future of America.
Michael Hudson
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Europe is acting in a very self-destructive manner, but is doing so because it's trying to be loyal to the United States.
Michael Hudson
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The concept of productivity in America is income divided by labor. So if you're Goldman Sachs and you pay yourself $20 million a year in salary and bonuses, you're considered to have added $20 million to GDP, and that's enormously productive. So we're talking in a tautology. We're talking with circular reasoning here.
Michael Hudson
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When there's deflation, it means that although most markets are shrinking and people have less to spend, the 1% that hold the 99% in debt are getting all the growth in wealth and income. Deflation means that income is being transferred to the 1%, that is, to the creditors and property owners.
Michael Hudson
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Actually, high housing prices don't help the economy. They raise the cost of living.
Michael Hudson
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People are putting their money into treasuries because they worry that the risk of putting their money into the bond market, the stock market or even the money markets is very high.
Michael Hudson
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So the political choice today is much like the 1930s, when the global economy also broke down. The choice is between nationalism and populism on the right, or socialism reviving what used to be left-wing politics.
Michael Hudson