The Paradox of Debt

Richard Vague

When we talk about debt and its impact on our economy, we almost always mean ‘government debt’. However, this is only a small part of the picture: individuals, private firms and households owe trillions, and these private debts are vital to understanding the economy.

In this iconoclastic book, Richard Vague examines the assets, liabilities and incomes of the entire country, private and public sector, to reveal its net worth. His holistic analysis shows that the real factor that drives both financial crises and spiralling inequality – but also, paradoxically, economic growth – is ever rising private debt. The paradox is that while debt is essential and our economy relies on it, it also brings instability unless it is periodically deleveraged – and that is very hard to do. It can, however, be carefully managed, and Vague ends the book by showing how to do so in policy areas ranging from trade and housing to financial policy and student debt.

Underpinned by pioneering data analysis and the author’s lifetime of experience in the financial world, no-one who wants to understand the deep, underlying dynamics of American economy can afford to miss this book.


ISBN: 9781800752184

Published: July 6, 2023


ISBN: 9781800752191

Published: July 6, 2023


Reviews for The Paradox of Debt

‘Richard Vague is this century’s incarnation of Walter Bagehot, Charles Mackay, and Charles Kindelberger, all in one: a successful banker, brilliant author, and contrarian economist with an encyclopaedic knowledge of the history of money and banking, and the parts of economic theory that are worth knowing – above all the contributions of Hyman Minsky. No-one else comes close to his blend of professional experience, oratorical flair, and critical insights’ – Steve Keen, author of Debunking Economics and Can We Avoid Another Financial Crisis?

‘Richard Vague is a rare combination of scholar, practitioner and communicator. In The Paradox of Debt he provides an essential guide to the modern economy that can be read with profit and pleasure by citizens and policymakers alike’ – Michael Lind, author of The New Class War and Land of Promise: An Economic History of the United States


Richard Vague

Richard Vague is Secretary of Banking and Securities for the Commonwealth of Pennsylvania. Before that he was the co-founder and CEO of two banks, managing partner of Gabriel Investments, an early-stage venture capital company, and co-founder, chairman and CEO of Energy Plus, an electricity and natural gas supply company. His previous books include A Brief History of Doom and The Case for a Debt Jubilee.