There's a reason ancient Judaism included a "Year of Jubilee", where all debts were forgiven every 50 years.
Compare and contrast with bankruptcy.
Debt Worldwide Hits Record $86k per Person
131–140 of 287 posts
Re: Debt Worldwide Hits Record $86k per Person
#132To anyone wondering what debt "means", or if some debts will ever be repaid, or wondering about "jubilees" where debts are forgiven, I recommend David Graeber's book "Debt: The First 5000 Years".
I am not sure if some of the ideas about debt that Graeber argues are correct, but he does discuss a lot of interesting examples of debt from societies throughout history.
Re: Debt Worldwide Hits Record $86k per Person
#133I'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…
My understanding is that reserve banks create money out of thin air and then 'loan' it to governments. Then governments use the money to pay for public projects. A lot of the money ends up going to large corporations through significant government contracts, grants and subsidies. When a government takes a loan from the reserve bank and puts it into circulation by giving the money to corporations to pay for public pro…
Yep, also keep in mind that the "new money" trickles down. Ie, prices rise faster than wages.
Re: Debt Worldwide Hits Record $86k per Person
#134Doesn'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.
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).
>"I owe hundreds of thousands on my house [...] my net debt is zero."
>"my house is worth significantly more than my debt"
You realize the value of your house dropping by 50% in a year would not be very surprising? And that would be mild, it is all up to which group of people the federal reserve chooses to benefit.
Re: Debt Worldwide Hits Record $86k per Person
#135I'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…
I agree that the article conflates a lot of issues and I can't find a clear explanation on how government debt is calculated. Most of the global debt in the world is from governments and in this case it isnt the worst thing as is usually a relationship where a government owes its own people money but the people owe the government money every year in taxes too.
> Most of the global debt in the world is from governments
I don't know about globally but in the US private debt is much bigger that government debt including local, state and federal.
Re: Debt Worldwide Hits Record $86k per Person
#136I'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…
My understanding is that reserve banks create money out of thin air and then 'loan' it to governments. Then governments use the money to pay for public projects. A lot of the money ends up going to large corporations through significant government contracts, grants and subsidies. When a government takes a loan from the reserve bank and puts it into circulation by giving the money to corporations to pay for public pro…
The idea is that the public projects increase everyone's wealth by a greater amount than the interest on the debt.
If you take money out of the equation and just consider that we have a large pool of labor to make use of, government's purpose in spending on projects is to allocate some of that labor towards long-term goals that no company would involve itself in as the pure profit potential is too risky, distant, or difficult to capitalize on.
Re: Debt Worldwide Hits Record $86k per Person
#137To anyone wondering what debt "means", or if some debts will ever be repaid, or wondering about "jubilees" where debts are forgiven, I recommend David Graeber's book "Debt: The First 5000 Years". I am not sure if some of the ideas about debt that Graeber argues are correct, but he does discuss a lot of interesting examples of debt from societies throughout history. https://www.mhpbooks.com/books/debt/ https://en.wiki…
>"To anyone wondering what debt "means", or if some debts will ever be repaid, or wondering about "jubilees" where debts are forgiven"
Can you just give the answers to these questions?
Re: Debt Worldwide Hits Record $86k per Person
#138To anyone wondering what debt "means", or if some debts will ever be repaid, or wondering about "jubilees" where debts are forgiven, I recommend David Graeber's book "Debt: The First 5000 Years". I am not sure if some of the ideas about debt that Graeber argues are correct, but he does discuss a lot of interesting examples of debt from societies throughout history. https://www.mhpbooks.com/books/debt/ https://en.wiki…
> "To anyone wondering what debt "means", or if some debts will ever be repaid, or wondering about "jubilees" where debts are forgiven" Can you just give the answers to these questions?
To be fair, he directed people to a >500 page book on the subject as a good introduction to some of these ideas. Do you expect him to effectively summarize a massive text in a single HN comment?
Re: Debt Worldwide Hits Record $86k per Person
#139Earlier quoted context omitted.
> 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…
"you can make a $1 of real savings circulate as though it were $1.50 or (probably a lot more) of circulating currency"
Quite a bit more, I think.
Like, banks only need about (I think) 9% actual money. So you can lend $9 off that one dollar.
But then that $9 gets deposited somewhere, and that bank can then lend $100-something... etc.
Though I could be mistaken about how fractional reserve banking works.
Re: Debt Worldwide Hits Record $86k per Person
#140Earlier quoted context omitted.
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.
But the 134K is only a validated if someone buys the house with 134K cash and/or credit. And that 134K is typically measured in terms of comps - nearby houses of similar size and similar condition... that were purchased with cash or credit. Currency is a ledger... one man's debt is another man's credit.