"This time is different" headwind

The Reinhart and Rogoff  "This Time is Different" meme is still the story that best explains the slow growth economy of the US and Europe. The time necessary to deal with a delevering problem is anywhere form 7-10 years. Their newest research that focuses on advanced economies since the Napoleonic Wars tells the same story. A delevering crisis is not just restricted to emerging markets. Crises may be a part of modern economy that engages in debt financing.

The headwinds from a delevering crisis cannot be eliminated through switching from private to public debt. The amount of credit has to be reduced.and there are only a few ways that this can be done. The delevering cannot be eliminated through expansion of the money supply except if there is higher inflation or a targeted expansion of credit based on need. The big lie is trying to tell the public that there is a way to avoid the pain of delevering.