Each additional dollar of credit seems to create less and less heat. In
the 1980s, it took four dollars of new credit to generate $1 of real GDP. Over
the last decade, it has taken $10, and since 2006, $20 to produce the same
More and more credit is now created just so existing debtors can repay their debt rather than to promote real investment and real GDP growth. Governments have just borrowed more and more since 2007 as they have come to the rescue but all this does is raise the national debt and cause bigger problems down the road. I think we need to get back to basics stop relying on debt (increasing national debts) and money creation (think Quantitative Easing) and concentrate on improving the real economy. This means a simplified and sensible tax and benefits system that creates incentives to work and invest, less employment of bureaucrats that spend too much time box ticking and not creating real wealth. There also needs to be better investment of tax payers money in education so that kids don't end up unemployed or committing crimes which is very costly. Finally, we need to fix the financial system so that participants are actually rewarded for making productive investments in the real economy and not rewarded (as is currently the case) for creating new complex financial products that only seem to transfer money to fund mangers and top bankers pay packets for making speculative investments that blow up once the bonuses have been paid. SIMPLES.