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考研英语阅读例题:Is there life after debt 债后还有生活吗.doc


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考研英语阅读例题:Is there life after debt 债后还有生活吗.doc
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Is there life after debt? 债后还有生活吗? [2010.06.24] The Economist DEBT is as powerful a drug as alcohol and nicotine. In boom times Western consumers used it to enhance their lifestyles, companies borrowed to expand their businesses and investors employed debt to enhance their returns. For as long as the boom lasted, Mr Micawber ’s famous injunction appeared to be wrong: when annual expenditure exceeded e, the result was happiness, not misery . For a long time debt in the rich world has grown faster than es. In America private-sector debt alone rose from around 50% of GDP in 1950 to nearly 300% at its recent peak. The origins of the boom go even further back, reflecting huge changes in social attitudes. In the 19th century defaulting borrowers were sent to prison. The generation that lived through the Great Depression learned to scrimp and save. But the wider take-up of credit cards in the 1960s created a“ buy now, pay later ” society. Default became just a lifestyle choice. The reckless lender, rather than the imprudent debtor, was likely to get the blame. As consumers leveraged up, so panies. The average bond rating fell from A in 1981 to BBB- today, just one notch above junk status. Firms that held cash on their balance-sheets were criticised for their timidity , while bankruptcy laws, such as America ’s Chapter 11, prevented creditors from foreclosing panies. That forgiving regime encouraged entrepreneurs (in Silicon Valley a bankruptcy is like a duelling scar ina Prussian officers ’ mess) but also allowed too many panies to survive (look at the airlines). The road to riches was simple: buy an asset with borrowed money, then sit back and watch its price rise. All this was encouraged by the authorities. Any time a debt crisis threatened the economy, central banks slashed interest rates. The prospect of such rescues reduced the risk of taking on more debt. Bubbles were created, first in equities, then in housing. It was a ary ratchet, in which each cycle ended with much higher debt and much lower interest rates. Rich-world countries now face two sets of problems. The most pressing is how to pay off their debts. Many people who have cut back their credit-card spending and firms which have seen their credit lines slashed would be horrified to see how little the rich world ’s overall burden has fallen. Much of the debt has merely moved from the private to the public sector as governments have correctly stepped in to support banks and save the economy from falling into depression. All this debt will have to be regularly refinanced and rolled over. Crises of confidence are likely, given that the rich world ’s trend rate of growth (and thus the ability of debtors to service their loans) looks set to slow. Worse, much private debt is secured against assets; while the value of the debt is fixed, the value of the assets can fall. This can cause a vicious circle as debtors are forced to sell 内容来自淘豆网www.taodocs.com转载请标明出处.
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