An Economy That’s Dependent on Financial “Fixes” Is Fatally Distorted

18 August 2023

Reliance on constant borrowing and fiscal stimulus is masking the real issues within the economy. While we’re flooded with narratives of economic growth, low unemployment, and rising wages, the underlying foundation is shaky. The belief that central banks and governments can endlessly borrow and spend to fix any problem is misguided. This overconfidence in financial solutions overlooks the real-world consequences, such as debt-induced inflation, increasing wealth inequality, and stagnating economic growth. As more money is thrown at these issues, diminishing returns are evident, and problems are exacerbated instead of resolved. The ever-growing mountain of debt and its consequent interest payments eventually suffocate genuine investment and consumption. Relying solely on financial “tricks” distorts the economy’s capacity to address genuine challenges. Eventually, reality will catch up, potentially leading to a market crash and systemic collapse. Blind faith in perpetual borrowing and spending is a dangerous game.

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