From Creative Destruction to Destructive Creation

Abstract

The article underlines that uncontrolled and wasteful debt is the main culprit for a economic system that not only makes inequality in the world methodically more extreme, but also systematically misdirects economic resources. Mainstream economic thinking is plainly wrong in circumstances of extreme debt and it is only used as a veil for the wealthy to become wealthier at the expense of the economic agents of a country. Austerity policies that are usually prescribed as the solution in highly indebted countries only serve the interests of the bond holders and those who seek to gain from the misfortune of the country that finds itself sinking in debt.

Keywords: Economic development, repayment capability, corporate lending, credit risk

JEL Classification: D61, G17, G21, G33