The Next Stage Of Deleveraging Means Return Of The Great Depression

At the FT, economist Thomas Palley goes metaphor crazy arguing that we're heading for a double dip, and that the possibility of a Second Great Depression should not be written off.

Deleveraging can be understood through a metaphor in which a car symbolises the economy. Borrowing is like stepping on the gas and accelerates economic activity. When borrowing stops, the foot comes off the pedal and the car slows down. However, the car’s trunk is now weighed down by accumulated debt so economic activity slows below its initial level. (more)