An Essential Guide to the Modern Economy for Citizens and Policymakers


(NewsUSA) - "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." (Author Michael Lind)

The well-credentialed Vague, who recently served as Secretary of Banking and Securities for the Commonwealth of Pennsylvania, has established himself as a clear and independent voice in the ongoing conversation about the role of private sector debt in the global economy.

And now he shares his thinking and presents readers with a new view of macroeconomics in his very informative, important and readable book The Paradox of Debt: A New Path to Prosperity Without Crisis (University of Pennsylvania Press).

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.

Richard VagueIn this iconoclastic book, 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 spiraling 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, this book is essential for anyone who wants to understand the deep, underlying dynamics of the American economy.

“Debt is a paradox,” writes Vague. “It creates and destroys. Even short of those extremes, it distorts.”

“As we as a society come to better understand debt, it will become possible to more accurately forecast economic trends, predict financial crises, shape policy decisions, and understand how national wealth grows and thus how to address inequality.”

Vague’s other works include A Brief History of Doom, The Next Economic Disaster,Illustrated Business History of the United States and The Case for a Debt Jubilee. He serves on the University of Pennsylvania Board of Trustees and the Penn Medicine Board of Trustees and is founder of the economic data service Tychos ( and the email newsletter service, which focuses on nonfiction literature.

Says Steve Keen, author of The New Economics: A Manifesto, "Richard Vague is this century’s incarnation of Walter Bagehot, Charles Mackay, and Charles Kindleberger, all in one: a successful banker, brilliant author, and contrarian economist with an encyclopedic 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."