“After the 1970s, real capital played a smaller and smaller role. It was replaced by credit and its sinister twin: debt.  The r in Piketty’s now famous annotation r > g is supposed to represent the return on capital investment.  But where did the wad come from?  Savings rates went down. Real earnings went down. Growth rates went down. So how could there be more capital available and how could it produce higher rates of return (compared to economic growth)?   The whole thing is a headache for a thoughtful man. Capital investments with no real capital behind them. Profits that outstrip the economic growth from which they must come.  What to make of it?”

http://www.bonnerandpartners.com/what-you-need-to-know-about-the-wealth-inequality-debate/

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