Robert Lucas on debt — unbelievable stupidity even to come from Chicago

30 Sep, 2013 at 18:33 | Posted in Economics | 5 Comments


Interviewed in this television documentary on the the economic crisis, Nobel laureate Robert Lucas answered a question (wind to 19:40 in the programme) if the level of debt was a problem, by telling us that the high level of debt is not an interesting problem, since, for a country as a whole, debt and credit always “cancel out.” Unbelievable stupidity even to come from a Chicago economist. Fortunately Dirk Bezemer and Steve Keen were also interviewed and could sort things out and give a more sensible view on the increasing indebtedness of modern economies.

5 Comments

  1. It is nothing short of religion if you think about It(mainstream economics).

  2. Debt and asset, rather than debt and credit, surely?

    Agree that this is a very stupid argument. And you’d see the likes of Lucas make exactly the opposite case in the case of government debt! Ridiculous.

  3. Strangely, those guys that are always so keen to consider single individuals, rather than society as a whole, don’t worry about debt, because it “cancels out” at the national level.


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