Wall Street on the TundraQuote...When you borrow a lot of money to create a false prosperity, you import the future into the present. It isn’t the actual future so much as some grotesque silicon version of it. Leverage buys you a glimpse of a prosperity you haven’t really earned....

QuoteOriginally posted by: MCarreiraWall Street on the TundraQuote...When you borrow a lot of money to create a false prosperity, you import the future into the present. It isn’t the actual future so much as some grotesque silicon version of it. Leverage buys you a glimpse of a prosperity you haven’t really earned....This all boils down to one of the points I made earlier in a different forum - leave within your means

Interesting! That Iceland was #1 on United Nations’ 2008 Human Development Index suggests that this index isn't as useful as one might hope. Perhaps it's akin to Lehman Brothers winning "risk manager of the year"?My only fear is that this article might teach the wrong lesson -- that borrowing is bad. Although borrowing can create a false prosperity, it can also create true prosperity to the extent that the borrowed money creates assets that produce economic value (not just speculative appreciation) that is more than the cost of borrowing (within a timeframe that is less than the duration of the borrowing). I can only hope that the US and EU, as they borrow to stimulate their economies, will spend the borrowed money wisely. Otherwise, the government deficits will be just the last gasps of a global Iceland-like crash.

Though Lewis associates the Human Development Index with being "well-to-do," IIRC it originated as an attempt by left-leaning economists like Amartya Sen to provide an alternative to "opulence-oriented" measures of economic development alone. It's in any case a combination of life-expectancy and educational attainment as well as GDP, so it'll be interesting to see how far Iceland falls in terms of the index as a whole.http://en.wikipedia.org/wiki/Human_Development_Index http://en.wikipedia.org/wiki/Human_Development_Index

The HDI is as Peter71 says an attempt by those of a "leftist" persuasion to find a metric that suits the policies they like.The weightings are without any real foundation, and don't include job specific training, a major contributor to society.It confuses cause and effect. Education is (perhaps) a cause of greater human happines, but is not a measure of it.It does attempt to include wealth but in a way that even an undergraduate economist should spot as bogus. The evidence is pretty clear that the absolute level of wealth is nowhere near as important as the rate of change, a fact that should be very clear to us now. The 2 to 5% drop in GDP experienced is affecting poeple's morale a lot more than the fact thatr they live in a country whose GDP per head may be twice or half other counties.Life expectancy is a troubling number, and begs the question of how it is measured. China "loses" a lot of children, but if they are not killed by their parents live longer than the average. Americans have one of the highest LE's but the variance is huge, many areas of the USA have child mortality rates comparable to parts of Africa.A better metric would include the variance in life expectancy as well as the mean, but again how do you "add" life expectancy to education without in a way that is not just weighting things to make your political views seem valid ?Personally, I think that there is a better, more objective measure that does not reflect the political preferences of an economist...Immigration. People move to where they believe their lives will be better.Almost no one wants to immigrate to China, Russia or Brazil. OK, N. Koreans try to get to China, but being better than N. Korea is not a badge of pride.Canada (which has always done well on HDI) has so many people wishing to move there that it has amongst the toughest visa regimes in the world. Even though it brands itself as somewhere set up for the benefit of faithful Moslems, Iran loses people to the USA. In the EU, labour movement is less free than the USA, but still relatively easy, and has seen a large move from East to West, whilst natives of the north western countries tend to move to nicer climates and lower living costs on the Mediterranean.Immigration relfects the ability of a country to create decent jobs, and how parents believe it will help develop their children, and its notable that a large % of permanent migrants have families.