Nassim Nicholas Taleb, author of one of my favorite books, The Black Swan, and closet Austrian theory economics student, is someone whom we should all listen to when he talks about economics. He said this at a conference in Ukraine:
… the current global market turmoil is worse than it was in 2008 because countries such as the U.S. have larger sovereign-debt loads.
“Definitely, we face a bigger problem now and we will pay a higher price,” Taleb, who is also a professor at New York University, said today at a news conference in Kiev, referring to the turmoil during the last global financial crisis. “The structure of the problem has still not been understood. We haven’t done anything constructive in three and a half years. Nobody wants to do anything drastic now.” …
Taleb urged countries to keep their budgets balanced, criticizing President Barack Obama of “loading the U.S. with debt that our children will have to pay” and said that growth fuelled by government debt isn’t really growth.
Hat tip to Matt H
Real gdp should be measured by deducting government deficit from the total gdp.