Ronald M. Laszewski’s Peak Debt and Income paper

In 2008 I posted Ron’s paper on Peak Debt. He recently extended his work, in a new paper called Peak Debt and Income.

Once again, I’ve got a piece up at Wise Bread that provides an overview of paper:

Laszewski creates a simple model of the economy as a tool for investigating the question of how to get household balance sheets back in order after suffering the problems diagnosed in the earlier Peak Debt paper…

Really, though, you ought to read the paper. (The math in this one isn’t as tricky as the math in the original Peak Debt paper.)

Ronald M. Laszewski’s peak debt paper

Ron has kindly let me host his fascinating peak debt paper on my site.

I take a quick look at the paper in my Wise Bread post on Peak Debt:

Is there a limit to how much Americans can spend?  Clearly there is:  All they earn, minus savings and service on their existing debt, plus new borrowing.  Since the Bureau of Economic Analysis puts numbers on those very items, it’s possible to see just how close we are to the edge.  In a fascinating paper, Ron Laszewski does exactly that.  The results are rather depressing.

Whether you read my Wise Bread piece or not, if you can follow the math, I urge you to read Ron’s paper itself: peak-debt-pd-020708.