There's a reason ancient Judaism included a "Year of Jubilee", where all debts were forgiven every 50 years.
Debt Worldwide Hits Record $86k per Person
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Re: Debt Worldwide Hits Record $86k per Person
#22Does anyone actually still believe that these debts will all someday be repayed? Does anyone even believe that the amount of debt will go down, rather than up, over the course of any length of time? Even a day? I don't, which raises the question: how does a world where debt monotonically increases indefinitely work? Can that happen forever, in which case debt has just become a standin for currency (that allows people…
> Does anyone actually still believe that these debts will all someday be repayed?
Approximately no one, in all of history, has ever believed that all debt on the globe would be repaid, so “still” is inappropriate. This is why we have interest, debt jubilees, bankruptcy laws, legal provisions for discharge of certain debt separate from bankruptcy, negotiated debt modifications (and laws which facilitate them), security for debt (and in some cases limitations on collections beyond the security) and numerous other current and historical features of society.
> Does anyone even believe that the amount of debt will go down, rather than up, over the course of any length of time?
Why should it? The number of people is increasing, as is their average economic output, as is (globally, and in long-term trend) lifespan. So real (much less nominal) aggregate debt can increase over time with no meaningful change to what the average person owes (and is owed) as a proportion of their expected future output.
Re: Debt Worldwide Hits Record $86k per Person
#23Similar to how the US bailed out the banks. How about the citizens are bailed out. It would boost the economy. Restore faith in the system!
Didn't work out so well in Mr. Robot.
Re: Debt Worldwide Hits Record $86k per Person
#24Does anyone actually still believe that these debts will all someday be repayed? Does anyone even believe that the amount of debt will go down, rather than up, over the course of any length of time? Even a day? I don't, which raises the question: how does a world where debt monotonically increases indefinitely work? Can that happen forever, in which case debt has just become a standin for currency (that allows people…
Of course. The money supply increases monotonically out of thin air.
Think of it. A few centuries ago, there simply wasn't $80000 dollar in the whole world. You'd be quite wealthy for having a single dollar.
Re: Debt Worldwide Hits Record $86k per Person
#25Earlier quoted context omitted.
Exactly. Most people have significantly more than $86k debt in the form of a mortgage. I owe a lot more than $86k on the mortgage for my home. I have more assets than debt and I could pay off my mortgage but it's simply not the best way for me to spend my capital. Additionally, I suspect this article is using a median value for "average income" but a mean value for "average debt." This paints a misleading picture.
So, speaking in terms of net value, you don’t have debt.
Assets = Liabilities + Equity.
In other words, $350k home = $300k mortgage + $50k in equity. You still have debt. Its just that the debt was exchanged for something. Its the same equation for credit card debt.
No one takes on debt without receiving something in return.
Re: Debt Worldwide Hits Record $86k per Person
#26Earlier quoted context omitted.
Exactly. Most people have significantly more than $86k debt in the form of a mortgage. I owe a lot more than $86k on the mortgage for my home. I have more assets than debt and I could pay off my mortgage but it's simply not the best way for me to spend my capital. Additionally, I suspect this article is using a median value for "average income" but a mean value for "average debt." This paints a misleading picture.
So, speaking in terms of net value, you don’t have debt.
Speaking in terms of net value, neither does the world have "worldwide (...) record $86,000 [debt] per person".
Re: Debt Worldwide Hits Record $86k per Person
#27Re: Debt Worldwide Hits Record $86k per Person
#28Does anyone actually still believe that these debts will all someday be repayed? Does anyone even believe that the amount of debt will go down, rather than up, over the course of any length of time? Even a day? I don't, which raises the question: how does a world where debt monotonically increases indefinitely work? Can that happen forever, in which case debt has just become a standin for currency (that allows people…
It's worth reading the Ray Dalio debt crisis book to see how this might end - the most likely scenario is the US, Japan, and EU all encountering cash flow problems in the next recession that they resolve by devaluing their currency. In that sense people have less money today than they believe. If all the major currencies and stock markets crash at the same time, there's no safe place for everyone to keep their money.
Re: Debt Worldwide Hits Record $86k per Person
#29Earlier quoted context omitted.
Me too! I think some things like “unsustainable food production” will probably slowly resolve itself with increases in automation and efficiency, but I do think runaway global warming will need a drastic solution. What other ones do you think will be hardest to solve?
>runaway global warming will need a drastic solution I look forward to our subterranean future. I think the combination of vehicle automation and tunneling technology will allow us to build massive underground systems. If things get too rough on land, we can go below the surface.
So you're thinking Musk is using the Boring company to build huge underground living spaces?
Re: Debt Worldwide Hits Record $86k per Person
#30Earlier quoted context omitted.
Me too! I think some things like “unsustainable food production” will probably slowly resolve itself with increases in automation and efficiency, but I do think runaway global warming will need a drastic solution. What other ones do you think will be hardest to solve?
>runaway global warming will need a drastic solution I look forward to our subterranean future. I think the combination of vehicle automation and tunneling technology will allow us to build massive underground systems. If things get too rough on land, we can go below the surface.
I secretly believe that for all of the bluster about Mars, Elon's real goal is to produce the technology base necessary for humans to live here on Earth following the collapse of the biosphere.
Why go to Mars to encounter an atmosphere hostile to life when we can all collectively experience right here at home?
Storms washed out your fiber optic cables? Starlink. No place to hide from the hostile surface? Boring Co. Need to remediate the atmosphere? Solar panels / Powersats -- I believe he's being reserved about Powersats. Need to move things around without easy access to transport? Electric vehicles. Need energy storage through the night time because the baseload power stations have all fallen into disrepair? Grid storage. Building your Gigafactory in a desert? Future-proofing.