The credit crunch: your questions answered
5:36pmWe've started posting economic analyst Graham Turner's answers to readers' questions on Trading Floor. You can view Graham's responses here.
Monday, 23rd June 2008
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Rex Burr
July 3rd, 2008 3:40pm Report this commentBorrowing doesn’t increase a population’s buying power, it just brings it forward.
When borrowing is up to the limit, the party has to end and spending returns to the level it would have been without credit, less the interest charges.
So how does credit boost an economy?
(I realise that borrowing by business for investment is another story.)
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