Debt, In the Long Run, is Not Meaningful- Grantham

Although Grantham does give some interesting insights, in other ways I think he is missing the broader picture. Debt is not just an accounting entry, it is a contractual claim on your or some group's future productive capacity that also represents the pull forward of future demand. Grantham's thesis of a low growth world is predicted on debt and its consequences, at least in my opinion. Additionally, he claims that government intervention, via spending, is a preferred economic stimulus over monetary or other methods. This completely disregards the fact that the money spent by the government has to be acquired from somewhere, i.e. taxes or money printing, both of which reduce the capabilities or private individuals and businesses produce and expand. This says nothing to the fact that in a fractional reserve banking system system with fiat money that debt and money become synonymous. 


Still, I may have to put my foot in my mouth when the broader interviewed is aired.


Via Bloomberg.....