Ron Paul : “we have a recession [because] we have not liquidated the debt”

The quote in the title is taken from the transcript of the December 10 Republican primary debate. According to Ron Paul the stimulus creates excessive debt and is a repeat of the mistake of the of Great Depression. To put this judgment in perspective, here’s a graph reproduced from the post Age of deleveraging in Steve Keen’s blog:

The private debt is being liquidated, fast, but this is partially offset by a rise in public debt…

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