but half the world will never earn 86k in their whole life
Debt Worldwide Hits Record $86k per Person
121–130 of 287 posts
Re: Debt Worldwide Hits Record $86k per Person
#122Earlier quoted context omitted.
> Debt allows people to own homes and cars and pay for education and invest in business. Debt means you are optimistic about the future. How about having homes and cars and education without debt? It's not like you need to be in debt to another and to steal from your feature to have nice things...
You are basically arguing that most people should never be able to own real estate, doomed to live as perpetual tenants. Over the course of a lifetime, that is actually more expensive than a 30 year mortgage.
And I think you're arguing that the disappearance of mortgages would have no effect on real estate prices. IMO, and that of many others, loose credit has been the major factor driving up property prices to their current insane heights.
There's a place for credit, but right now I think it does more harm than good.
Re: Debt Worldwide Hits Record $86k per Person
#123Doesn't debt have to sum to zero globally? A debt held by one person is an equal asset owed another. Or perhaps this is a measure of the number of debts outstanding, divided per person, but not accounting for assets.
Not necessarily. The value of debt as an asset is often less than the amount owed, because there is a non-trivial risk that the debt will not be paid back in full. Furthermore, if you are a central bank, you can effectively borrow money from your future self.
Re: Debt Worldwide Hits Record $86k per Person
#124Earlier quoted context omitted.
I honestly do not understand this perspective and would like to be enlightened. The only way a young person could be given a house without owing any debt would be if someone else bought it for them or if the government paid workers to build houses for everyone. However, if the government paid people to build houses without any payments in return the government would be collected the debt which it would then hold. Thi…
Previous generations bought homes in early 20s, and paid off their mortgages in 7-10 years, so by their mid-30s their housing expenses were rather low. And inflation helped with the payments too. Our generation gets 25-year mortgages, and very little help from inflation.
When were you born, and what country do you live in?
As someone born in the 1980s in the USA, I don't think this is true. I believe that the 30 year mortgage has been the standard here since sometime in the mid 20th century.
Re: Debt Worldwide Hits Record $86k per Person
#125There's a reason ancient Judaism included a "Year of Jubilee", where all debts were forgiven every 50 years.
If all debt was forgiven every 50 years, why would any lender lend money with a term going past the year before the jubilee?
You're thinking too much in terms of modern debt. In ancient (and not-so-ancient) times, the ordinary peasant always owed something to the landowner/sovereign for the privilege of dwelling on their land.
Sometimes, that debt would be higher than what could reasonably be paid back and so the debt would accumulate.
In other words, they'd rig the game from the start and then loosen the thumbscrews along the way.
Re: Debt Worldwide Hits Record $86k per Person
#126I'm ignorant on this, but to me there are two kinds of debt. 1) Personal debt, like I took out a car loan and I can get the car repossessed or the loan sold to debt collectors. 2) Debt that exists just to create more money i.e. the IMF or Fed Reserve decide to have an expansionary monetary policy and they lend from... what exactly? The purpose is to just control inflation. I'm guessing this is the second kind of debt…
> 1) Personal debt, like I took out a car loan and I can get the car repossessed or the loan sold to debt collectors. 2) Debt that exists just to create more money i.e. the IMF or Fed Reserve decide to have an expansionary monetary policy and they lend from... what exactly? As far as I know, these two are the same. In a fractional reserve banking system, when you borrow money from the bank for a car or a house, that…
The money isn't created from "nothing" - it's definitely real money from real people's savings accounts.
The difference is that on a large enough scale, you can make a $1 of real savings circulate as though it were $1.50 or (probably a lot more) of circulating currency and there's huge benefits to doing that (when it's backed by real productivity).
The source of things like the 2008 collapse was the dark side of that - trillions of dollars debts, backed by no possible amount of productivity that could repay them (and tons of fraud allowing these to exist on the books).
Re: Debt Worldwide Hits Record $86k per Person
#127Earlier quoted context omitted.
If all debt was forgiven every 50 years, why would any lender lend money with a term going past the year before the jubilee?
Well, in part the ideas was not get into big debts. People could self-sustain much more easily in the past. No need to buy iPhone each year help on that. Is important to note that the jubilee was a measure against the worst case scenarios: Persons that sell themselves as slaves (or sons of slaves), people that lost the hereditary land and things like that. This also means the society was based around this expectation…
> People could self-sustain much more easily in the past.
Why? Why has the ability for debt-free self-sustaining decreased?
Re: Debt Worldwide Hits Record $86k per Person
#128Earlier quoted context omitted.
> Does anyone actually still believe that these debts will all someday be repayed? I don't understand why you would ask this question. On the individual level its obvious that some debts won't be. It happens all the time for a lot of reasons. So I assume you aren't talking about the individual level. But on the macro level zero debt is a very bad idea and unless civilization collapses there will always be debt. Debt…
I find it difficult to reconcile this POV with environmental concerns. That elusive "debt" is 100% convertible to real resources (land, water). We have more debt because we consume too many things we don't need. How is that good?
"excessive consumption" based interpretations of environmental policy have done more damage to the cause of environmentalism then anything else.
Re: Debt Worldwide Hits Record $86k per Person
#129Earlier quoted context omitted.
$86,000 per person.
For the downvoters: if it's a different number, where did the rest of the money go?
Asset values are not static.
e.g if you borrowed $100K for to buy your $110K house 10 years ago, you may have $86K remaining on your mortgage today and your house might have appreciated to $134K.
Re: Debt Worldwide Hits Record $86k per Person
#130Does 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…
Money is abstract labour. Debt is promised future labour. An individual cannot become wealthy in currency that retains meaningful value without others piling up implied debts. If you have saved money but no else has debt you can't compel anyone to work in exchange for your saved money. Debt is inherent to currency.
This deserves more upvotes. This is the most succinct, tangible explanation I've come across recently.