The Next Economic Disaster

Why It's Coming and How to Avoid It

Richard Vague

University of Pennsylvania Press

104 Pages, 5.50 x 8.50 in, 24 illus.

Hardcover
9780812247046
Published: August 2014

$19.95

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eBook
9780812291100
Published: July 2014

$19.95

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Current debates about economic crises typically focus on the role that public debt and debt-fueled public spending play in economic growth. This illuminating and provocative work shows that it is the rapid expansion of private rather than public debt that constrains growth and sparks economic calamities like the financial crisis of 2008.

Relying on the findings of a team of economists, credit expert Richard Vague argues that the Great Depression of the 1930s, the economic collapse of the past decade, and many other sharp downturns around the world were all preceded by a spike in privately held debt. Vague presents an algorithm for predicting crises and argues that China may soon face disaster. Since American debt levels have not declined significantly since 2008, Vague believes that economic growth in the United States will suffer unless banks embrace a policy of debt restructuring.

All informed citizens, but especially those interested in economic policy and history, will want to contend with Vague's distressing arguments and evidence.

Preface
Chapter One. Boom and Crisis
Chapter Two. The Deleveraging Challenge
Chapter Three. The Paradox of Debt and the Long-term View
Conclusion
Acknowledgments

Appendices can be found online at www.debt-economics.org/appendix/

Philanthropist and former banker Richard Vague is a managing partner of Gabriel Investments and Chairman of The Governor's Woods Foundation.

"Economists failed to predict the 2007 meltdown and they're on course to miss the next one too. As a consumer lending practitioner who saw it coming, Richard Vague's voice should not be ignored. His emphasis on the dangers of rising private household debt is a key both to the last crisis and the next."—Ed Luce, Financial Times Chief U.S. Commentator and Columnist

"If you want to understand why financial crises occur, read The Next Economic Disaster. In this penetrating new book, serial entrepreneur Richard Vague succinctly documents how all financial collapses originate with too much private borrowing. In plain English, he outlines some of the steps we need to take to avoid the next cataclysm."—Liaquat Ahamed, author of Lords of Finance: The Bankers Who Broke the World

"We all know that too much debt is bad. But if you want to know how bad, you need to read this book. Packed with insightful analysis, it is a must-read for anyone who wants to understand how we got onto the road to financial ruin-and how to avoid the next disaster."—Megan McArdle, Bloomberg View

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The Next Economic Disaster

Why It's Coming and How to Avoid It

The Next Economic Disaster

Why It's Coming and How to Avoid It

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