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The Economy In a Nutshell

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Modus Tollens Posted: Fri, Mar 13 2009 3:27 PM

The people who borrowed too much now cannot earn enough to pay back those who saved, because the people who saved didn't save enough to pay for what the borrowers have made. The borrowers borrowed too much and the savers didn't save enough, because interest rates were not high enough. Prices at first rose when the borrowers borrowed too much, and then prices later fell because savers didn't save enough. If savers had saved enough, or borrowers had not borrowed so much, then prices would not have risen and fallen as such, and so there wouldn't be any credit crunch.

A criticism that can be brought against everything ought not to be brought against anything.
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