Debt a la Enron

[Max B. Sawicky]

GDP is not affected by indebtedness as far as accounting
goes.  GDP is a current production measure.  Debt goes to
the balance sheets of firms, which are already thought to
be in bad shape.  The role of derivatives in adding to
'financial fragility' is also well recognized.  It works
the other way too -- capital gains are not included in GDP either.

Some people point to indebtedness as a sure basis for deep
recession at some unspecified point in the future.

mbs

How about the the possibility that Enron's practices in hiding debt --
partnerships, off-shore accounts, etc. -- are not unique to Enron?  If a
significant number of other American firms are doing similar things to
tweak their balance sheets (with the help of complaisant auditors) --
wouldn't the true state of the American economy over the last few years be
quite different from the common estimate?  --CGE