“Credit expansion can bring about a temporary boom. But such a fictitious prosperity must end in a general depression of trade, a slump.”

— Ludwig von Mises , book Socialism

Socialism (1922), Epilogue (1947)

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Ludwig von Mises 62

austrian economist 1881–1973

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“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”

Ludwig von Mises book Human Action

Source: Human Action (1949), Chapter XX: Interest, Credit Expansion, The Trade Cycle, § 8 : The Monetary or Circulation Theory of the Trade Cycle

“Persons in trade had better be very cautious how they add a fictitious name to their firm, for the purpose of gaining credit.”

Edward Law, 1st Baron Ellenborough (1750–1818) Lord Chief Justice of England

Guidon v. Robson (1809), 2 Camp. 304.

“Any one country can be in any of four possible disequilibrium situations. It can be (1) a surplus country with a domestic slump, (2) a surplus country with a domestic boom, (3) a deficit country with a domestic slump, or (4) a deficit country with a domestic boom.”

James Meade (1907–1995) British economist

Source: The balance of payments, 1951, p. 158; As cited in: Metaxas & Weber (2013, p. 20)

“Without the expansion of a Mutual Enterprise economy responsible to communities and nature, this present boom will bust, creating a Greater Depression than that of the 1930's.”

Paul Glover (1947) Community organizer in Philadelphia, Pennsylvania; American politician

http://www.paulglover.org/9712.html (“Stock Market Long Range Forecast” HOUR Town, cover story), December 1997

“THERE is widespread agreement among economists that abuse of credit constitutes one of the chief unwholesome elements in business booms and is mainly responsible for the ensuing crash and depression.”

Benjamin Graham (1894–1976) American investor

Part III, Chapter XIII, The Reservoir Plan and Credit Control, p. 153
Storage and Stability (1937)

“At home, as well as abroad, there is paralyzing uncertainty among business men as to whether the Reserve Board will allow that expansion of bank credit without which such prosperity as we have had in recent years simply cannot last. In short, the Board has created a state of mind which breeds business depression.”

William Trufant Foster (1879–1950) American economist

Foster and Catchings, in: The Atlantic Monthly, Vol. 144, (1929), p. 102; cited in: William J. Barber. From New Era to New Deal. 1988, p. 77.

“The best you can say about economic policy in this slump is that we have for the most part avoided a full repeat of the Great Depression. I say “for the most part” because we actually are seeing a Depression-level slump in Greece, and very bad slumps elsewhere in the European periphery. Still, the overall downturn hasn’t been a full 1930s replay. But all of that, I think, can be attributed to the financial rescue of 2008-2009 and automatic stabilizers. Deliberate policy to offset the crash in private spending has been largely absent.”

Paul Krugman (1953) American economist

"Economics in the Crisis" http://krugman.blogs.nytimes.com/2012/03/05/economics-in-the-crisis/ (March 5, 2012)
The Conscience of a Liberal blog

“The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”

Ernest Hemingway (1899–1961) American author and journalist

Notes on the Next War (1935)

“That's the thing about depression: A human being can survive almost anything, as long as she sees the end in sight. But depression is so insidious, and it compounds daily, that it's impossible to ever see the end.”

Elizabeth Wurtzel book Prozac Nation

Source: Prozac Nation

“When credit is expanding, the rising price level and high profits bring about a high rate of interest. When the expansion has reached, the limit permitted by the stock of gold, the rate of interest is put still higher in order to bring about a fall in the price level. When the fall in prices takes effect, a low rate of interest becomes appropriate, and when credit contraction has proceeded so far that a redundant supply of gold has accumulated, the rate of interest is depressed still lower in order to bring about a renewed rise in the price level. Thus a high rate of interest corresponds first with rising, then with falling, prices, and so synchronizes with high prices. A low rate of interest corresponds first with falling, and then with rising, prices, and so synchronizes with low prices.”

Ralph George Hawtrey (1879–1975) British economist

Ralph George Hawtrey, quoted in Irving Fisher, The Theory of Interest (1930), Chapter 19. The Relation of Interest to Money and Prices

“Credit expansion can bring about a temporary boom. But such a fictitious prosperity must end in a general depression of trade, a slump.”

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Ludwig von Mises 62

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