Reply To: Debt


A healthy economy is one that satisfies our preferences. If we have higher time preferences, then we want the economy to growth less rapidly so that we can devote more resources to producing consumer goods now instead of building up a bigger capital structure to produce more consumer goods in the future.

One might claim that it’s better for people to have lower time preferences instead of higher, but economic theory makes no judgment about what people’s preferences are. Economic theory explains which means are suitable to attain the ends people prefer and which are unsuitable.