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Debt Worldwide Hits Record $86k per Person

bloomberg.com

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Re: Debt Worldwide Hits Record $86k per Person

#151

Post by Spooky23 »

paulddraper wrote: post #127
mamcx wrote: post #109

Earlier quoted context omitted.

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?

There’s 25x more people, and increased specialization required to do almost all essential things.

Re: Debt Worldwide Hits Record $86k per Person

#152

Post by Spooky23 »

jdoliner wrote: post #2

Does 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…

Currency is at some level always debt by its nature.

Re: Debt Worldwide Hits Record $86k per Person

#153

Post by heartbreak »

nonbel wrote: post #134
beatgammit wrote: post #87

Earlier quoted context omitted.

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.

At the end of the day it's still a house.

Re: Debt Worldwide Hits Record $86k per Person

#154

Post by Spooky23 »

nikanj wrote: post #105
bb2018 wrote: post #62

Earlier 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.

My my area, which had median home prices most years, houses were 40-60% less expensive in real terms.

Another thing to keep in mind is that there far fewer homes and people made a lot less money.

Re: Debt Worldwide Hits Record $86k per Person

#155

Post by iambvk »

qwerty456127 wrote: post #145

What if we just delete all the debt and start from zero? Won't the zero (everything people have built and developed to the date) be better than if the debtors had never taken the credits? I would like a theoretical answer ignoring the ethical part and the fact creditors will become less willing to lend money again if this happens.

Why-Not depends on which side you fall into. There are two sides: People with Debt and People collecting Payments.

People-Paying would love to start from zero.

People-Collecting would not want that.

If you think about it as two groups (theoretically): one group receives monthly, recurring payments from the other group.

In practice, individuals move from one group to another group and back, etc. based on life circumstances.

But here is a catch: Due to a bug or design, if an individual (or few individuals or families) could always stay in the receiving-group, he can live for free till end of time (or system halts/collapses.)

What will blow your mind is, are there such individuals or families in the system by design?

Re: Debt Worldwide Hits Record $86k per Person

#156

Post by pjdemers »

jdoliner wrote: post #2

Does 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…

Debt can increase forever. What can't increase forever is the percentage of income going to interest on debt. So long as income increases at least as fast the interest, increasing debt is sustainable.

Re: Debt Worldwide Hits Record $86k per Person

#157

Post by licnep »

bb2018 wrote: post #10
wufufufu wrote: post #5

I'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.

The total government debt = total private sector savings, to the last cent. That is an accounting truth, for every debtor there is a creditor, and the creditor of the public sector as a whole is the private sector.

In reality, when you look at how government debt is actually computed, you will find that government debt is the sum of all the coins and banknotes in circulation, all bank deposits at the central bank, and all treasuries. Basically it's the sum of all the savings denominated in that government's currency. It is purely an accounting illusion, governments could also create money out of nowhere without accounting for it as "debt", but that is the accounting standard we are currently using, mostly an heritage from the gold standard times. I'm not sure what the article accounted for exactly, but if they just did a sum of government debt divided by human population, what the article really means is that there are in circulation about 86k dollars for every human, so the average human has a monetary wealth of 86k (with the median being of course much much lower). We should cheer on that number increasing ,the only bad case is if inflation is higher, so that means in real terms we are on average getting poorer even if we have more dollars per capita.

Re: Debt Worldwide Hits Record $86k per Person

#158

Post by FartyMcFarter »

kiliantics wrote: post #143
nonbel wrote: post #137

Earlier quoted context omitted.

> "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?

The answers are very complex. In the book, Graeber shows that debt is as much a cultural/social norm as any other abstract, social construct we've invented throughout history. What debt meant in early Buddhist Nepal or Sumeria or aboriginal Australia, and what it means in modern western economies is completely tied in with governmental/religious/familial etc. structures that existed in the given time. He goes into gr…

The book, page 3:

> and ask her to contemplate the justice of insisting that the lenders be repaid, not by the dictator, or even by his cronies, but by literally taking food from the mouths of hungry children.

I'm still willing to give this book a chance, but it's not a good look when the third page already contains an emotionally manipulative and gross misuse of "literally".

Re: Debt Worldwide Hits Record $86k per Person

#159

Post by nonbel »

heartbreak wrote: post #153
nonbel wrote: post #134

Earlier quoted context omitted.

> "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.

At the end of the day it's still a house.

What does that have to do with owing a bank 300k and then your assets are worth ~150k?

Re: Debt Worldwide Hits Record $86k per Person

#160

Post by TrinaryWorksToo »

vesrah wrote: post #142
thescriptkiddie wrote: post #123

Earlier quoted context omitted.

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.

Aren't all loans effectively borrowing money from your future self? :)

Not if you default or die. Technically, you're only borrowing from your future wealthier self.
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