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What is Non-Productive Debt

What is Non-Productive Debt and what you need to know about it

When you ask most people What is Non-Productive debt, they don’t understand the question. Why would someone want to take on debt that is non-productive? Seems like a silly idea.

Most of the time we consider debt to be productive. We buy a house and take a mortgage – we take on debt. Or we whip out our credit card, when we want to buy some popcorn at the movies. That purchase is a debt that we must pay back when the bill comes due. But some debt and especially debt on a macro level is Non-productive debt. It crowds out private investment and often, if not always, becomes a burden on the taxpayer.

In the following short video Daniel Lacalle, PhD, economist and fund manager and professor of global economy at IE Business School in Madrid discusses the perils of Non-Productive Debt

Non-Productive Debt

You can find other interesting articles on economics by going to the Mises.org

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I hope you enjoy this short video.

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