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"Germany's policies are creating a deflationary debt spiral because it puts pressure on wages and profits, and depresses the economy, and reduces the tax returns and the debt is expressed in nominal terms, and the debt burden is a ratio of the GDP to the debt, and so as the GDP declines, then actually the debt ratio goes against you, then you need more austerity, and that makes the economy decline some more and that's the trap that we are caught in now. And that, once we overcome the short-term problem, is a long-term problem, that could lead to a lost decade," he said.
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"Germany's policies are creating a deflationary debt spiral because it puts pressure on wages and profits, and depresses the economy, and reduces the tax returns and the debt is expressed in nominal terms, and the debt burden is a ratio of the GDP to the debt, and so as the GDP declines, then actually the debt ratio goes against you, then you need more austerity, and that makes the economy decline some more and that's the trap that we are caught in now. And that, once we overcome the short-term problem, is a long-term problem, that could lead to a lost decade," he said.
"Germany's policies are creating a deflationary debt spiral because it puts pressure on wages and profits, and depresses the economy, and reduces the tax returns and the debt is expressed in nominal terms, and the debt burden is a ratio of the GDP to the debt, and so as the GDP declines, then actually the debt ratio goes against you, then you need more austerity, and that makes the economy decline some more and that's the trap that we are caught in now. And that, once we overcome the short-term problem, is a long-term problem, that could lead to a lost decade," he said.
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