Debt Worldwide Hits Record $86k per Person

> By the government giving money to people? But where does the government get the money? By taking on debt? Then the government's even more deeply in debt, which means that we the people still are in debt, too.

But it's a lot easier to pay off, especially if you prioritize high risk debt to nationalize, so the government has a lower cost of borrowing (especially if the government, instead of paying off distressed debt, instead purchases it at current fair market value, since then the cost will be below the face value; “healthy” debts don't need a correction.)

I believe the statistic referenced in this headline is roughly total sum of debt in the world (184 trillion) / earth population (7.6 billion) is the total number of debt per person. I think what you are driving at is exactly why this article is misleading.

edit: I don't think debt is exactly zero sum. When a loan is made, the person who took the load has a debt of the present value of future loan payments(ie with interest accrued and adjusted for inflation). The lender has an asset that is the present value of the loan payments times the probability the loan will be payed off. I might be missing something here though.

I started a reply, but honestly, I just don't feel like it's worth the energy to follow up with the replies I'd get. Probably because of the tone of the response.

I don't see debt as all that much different than insurance. Sure, society can get by without it, and you may never need it, but society in general benefits. If I run a business any large expenses would be amortized over the lifetime of that thing. I could pay for it upfront, but that might never happen and if I could it wouldn't be the best use of my resources. Ideally, I'd "pay rent" in order to borrow money upfront, now that I have that machine it's easier to pay back since that fixed cost will benefit me for the next 20 years. That's the scenario where all debt is never paid back.

Financial tools, like anything else can be good or bad depending on the circumstances and motivations at play. Payday loans (generally seen as bad) aren't all that different from micro-loans lauded in third-world countries. Let's say there's an older woman who walks out of town to buy goods and carries them back to town every day to sell (arbitrage). If she gets a small loan to buy more goods up front, invest in a wheelbarrow, or a booth at the market she can do more business and more easily pay off that loan benefiting; her, the person offering the loan, the sellers and the buyers--society in general. If she cannot pay back the loan she can get into a debit spiral. There are situations where that is beneficial to the person giving her the loan at the expense of her and the rest of society.

I'm guessing it's the latter. I owe hundreds of thousands on my house, but my house is worth significantly more than my debt, so my net debt is zero.

I'm guessing this is just all debts added together, and then divided by the number of people. And it's probably including national debt, which is ~$58k/person in the US (which is surprisingly slightly below average for countries with debt).

Well people do take on debt for things that are quickly worth nothing. For example, you buy groceries with a credit card. You eat them; they are gone. But you still have the debt.

Or you buy a car. It quickly loses value, but you still have the debt based on the original purchase.

The formula still holds, but the "equity" part is negative, which leads many people to conclude that bankruptcy is a better option than paying for something they no longer have or is no longer worth what they owe.