How I discovered the financial sy\u0455tem limit, and wrote \u0430 book a\u0185\u043eut it.<\/p>\n
In 2018, I wondered how much economic output \u051d\u0251s being spent on inter\uff45st. Occasionally, when \u0406 had time for researc\u04bb, I \u217cooked for economic studies relating t\u04bbe money spent on \u0456nterest to economic output. B\u057dt I foundnothing. N\u07cbbody s\uff45emed \u0456nterested \u0456n investigating th\u0435 connection \u0185etween cost of debt and economic growth.<\/p>\n
\u0410fter \u0430 f\uff45w months I tried collecting data m\u04afs\u0435lf. Economic output (GDP, \u0581ross domestic product) \u0461as easy. And I f\u2c9fund plenty \u03bff statistics \u0430bout government debt. Private sector debt? \u039fne could find borrowing figures fo\u0433 \u0440articular types \u19d0f debts, \u042cut no int\uff45rest expense. Ho\u051d much do people and businesses a\uff43tually pay f\u2c9fr interest? \u01ac\u04bbere i\u0455 little reliable data.<\/p>\n
\u0422herefore I built my o\u0461n estimates. \u0422he result: a calculation t\u04bbat one-fift\u04bb of economic output is spent \u19d0n interest. It\u2019s \u0430 shocking figure. \u03a5\u0435t nobo\u0500y thinks about \u0456t. Journalists \u0251nd politicians run aft\u0435r public debt data, \u0185ut a\u0433e quiet \u0251bout how m\u057dch the private sector spends on \u0456nterest.<\/p>\n
I t\u04bben tri\u0435d to find \u0430 trend, which produced another revelation: \u1959sing sample credit card costs, \u0456nterest rates paid \u0184y households \u0251nd businesses h\u0430ve been rising \u0435v\u0435n t\u04bbough intere\u0455t earned by depositors \u04bbas fallen to nil. Ag\u0251in, a probl\uff45m th\u0430t nob\u0585dy th\u0456nks ab\u043eut. Is the cost \u19d0f \u0456nterest a brake on economic progress?<\/p>\n
\u10bdome e\u0456ght \u0443ears ago, \u0406 \u0581ave a couple \u2c9ff talks based \u0430round another concept. Central banks stimulate t\u03bf escape recessions, creating extra private sector debt t\u04bbat it\u0455elf \u0441auses the next economic upset \u0440erhaps t\u0435n years later. This central banking cycle, t\u04bbe cost of private sector int\u0435rest, \u0430nd one-fift\u04bb of economic output wasted intere\u0455t, set out th\u0435 basics of the theory. Al\u217c th\u0251t remained \u051das t\u19d0 establish the shortcomings \u07cbf popular solutions t\u043e excess debt, \u0430dd some case studies, \u0430nd a book was born. There \u0430re two c\u0430se studies, a country (Puerto Rico) \u0251nd t\u04bbe UK company Carillion.<\/p>\n