The government of Dubai requested a six-month "standstill" from creditors on paying back debt accumulated by Dubai World, causing a prompt downgrade to government-related debt from credit-rating agencies.
But by the end of his talk, he was focusing on the unlikely but dangerous possibility of deflation, which can cripple an economy by causing wages to fall, debts to become effectively larger and consumers to cut spending.
Kenneth S. Rogoff, a professor of economics at Harvard University and the co-author, with Carmen M. Reinhart, of "This Time Is Different," a history of financial crises, has repeatedly cautioned that this recovery would take longer than most other recoveries because this recession was caused by a debt-fueled financial crisis.
Higher home prices also raised debt in recent years by causing families to take out large mortgages in order to afford the houses they wanted.
2008 was a crisis caused by debt.
A lot of wars were caused by debt.
Living through a crisis caused by excessive debt, they will viscerally recoil at the prospect of federal debt without end.
Knowing how start making payments appropriately can help alleviate fears, and it can be a starting point to healing wounds within families caused by debt and deception.
The economic weakness caused by debt can thus make debt even harder to bear, a trap that Irving Fisher, a Depression-era economist, called "debt deflation".The deleveraging of the financial sector can be particularly deep, quick and nasty.
The authority has been grappling with yawning deficits caused by a heavy debt load and the slumping economy, which has choked off tax revenue that finances the transit system.
