Explaining Southern California's economy

Rather Short Book Review: Philip Coggan's 'Paper Promises'


So much debt. So little time left.

Philip Coggan is a very fine financial journalist with a real gift for providing clarity on a dense subjects and reducing the complex sweep of history to easier-to-understand structures. In the "Buttonwood" column he writes for The Economist, he routinely accomplishes this feat. In "Paper Promises: Debt, Money, and the New World Order," he ramps up that habit, taking a long look at the legacy of relationships between debtors and creditors while also offering a warning about the next major global financial crisis. (Hint: It involves China and the U.S.)

He starts off with a bang:

The massive debts accumulated over the last forty years can't be paid in full, and they won't be paid. The debt crises Of Greece, Ireland and Portugal are just the start. The economic outlook for some countries, particularly in Europe, is weak thanks to deteriorating demographics: the number of retirees is growing relative the number of number of workers. As a result, these countries' incomes wil not grow fast enough to service their debts. Either there will be foramal defaults...or there will be effective defaults....Economics and politics for the next decade and beyond will be dominated by this issue, as social classes and countries debate where the brunt of the pain will fall.