Lubas, Lauren. “Are You Ready for the Debt and Asset Bubbles to Pop?” Gold Alliance, 7 Sept. 2022, https://goldalliance.com/blog/market-insights/are-you-ready-for-the-debt-and-asset-bubbles-to-pop/.
Direct Quote: Debt bubbles occur when there is an excessive amount of debt that cannot be sustained — meaning that it can’t be paid off. Debt bubbles are dangerous to the economy because when they pop, it means that large corporations or massive amounts of people are defaulting on their debt, sending ripple effects across the entire economy.
Summary/My Interpretation: One of the biggest threats to any economy is the existence of asset bubbles. An asset bubble occurs when consumers flock to a certain good while the good itself doesn’t appreciate in value. Similarly, a subset of asset bubbles are debt bubbles which occur when a nation can not keep up with its increasing amount of debt. Overall this is problematic because as asset bubbles pop, they have huge impacts on the economy and often will lead to a recession.
How I Plan To Use This In My Project: One impact on the middle class I hope to cover in my paper is how large sums of debt can lead an economy to a recession. Specifically, I hope to paint the narrative that in the status quo the US’ debt is leading to large asset bubbles that will continue to inflate until they eventually burst. Overall this is important because as asset bubbles pop and actors default on them, it leads to massive hits on the economy since they often span multiple industries.
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