Chris Dillow finds
a silver lining to the ever-increasing amounts of leverage bidding up asset
prices around the world:
My generation (early 40s and older) left college with little debt, and could
buy relatively cheap housing. As a result, we could save, build up housing
equity, and perhaps pay off our mortgage quickly. This means many of us are
in a position to downshift (as I did years ago) or look forward to early retirement.
This means the economy could lose a cohort of highly-skilled workers.
However, more recent graduates are saddled with debt and high mortgages, and
so will have to work longer. This improves the long-run supply potential of
the economy.
This is the point at which happiness researchers start jumping up and down
and saying that people in rich economies who work themselves to death are hardly
the happier for it. But that’s downright uncapitalist, that is. Here’s to cripplingly-large
mortgages and student loans!