'Buy now, pay later' is sending the TikTok generation spiraling into debt

Maybe one should stop the blame game i.e. "The g-government d-did it!!!" and wonder why debt is increasing in general. The answer is that saved money is taken out of circulation. To keep the economy alive, a certain amount of money must flow through it.

Let's say $20 trillion must flow through the economy per year. People save $1 trillion. Only $19 trillion flow through the economy next year. Usually companies would simply borrow a new $1 trillion through loans into existence. However, with population growth slowing down, companies don't need to grow and invest more so they stopped borrowing. Consumers stepped in until they too thought that they have no need for further debt. To get back to $20 trillion, the government must now borrow money on behalf of all the people who aren't credit worthy enough to borrow money. The more people save, the more the government needs to replenish the circulating money supply just to stay at $20 trillion.

Of course in practice the government doesn't try to maintain a stable GDP, it wants a stable GDP plus some. The reason for that is that increases in productivity necessitate economic growth to maintain full employment. Yes, it's quite stupid. If you have an economy that isn't growing, then increasing productivity will concentrate income within the most skilled individuals even if they have no need for further income, which reduces overall economic efficiency as money is being allocated away from basic needs like housing or food and into the financial market.

Ever wondered why poverty appears to be a "human constant"? Because we think we should give all the money to the most skilled individuals without any regard to whether they actually need that money. When you think about it, jobs shouldn't be allocated to the most skilled, they should be allocated to those who need the money most as their spending will drive further economic activity that then lets the skilled work on useful things. Someone with a broken down car knows better how to spend their money than an investor speculating that you are going to spend your money on a $800 juicer. However, we know that the guy with the broken down car is in distress and we love abusing that situation to our benefit despite the fact that the economic inefficiency is obvious to the naked eye.

Assuming you have the money why is using these services a bad financial decision? Isn’t a good idea to postpone payments in an inflationary economy when there’s no interest?

The Australian government does the same thing; and also permits BNPL.

BNPL has been thoroughly, thoroughly investigated by the Australian government because people have the same conclusion as the HNers here - 'they must be doing something wrong'

But if anyone does what I do, which is to look more deeply into the topic, they'll discover that this is actually the least predatory form of consumer debt (if not the least, close to it), and for this reason governments are content to continue with it.

Agree, I think there's also an overblown perception that you need to obtain credit and loans in order to build a decent credit rating. Which whilst true, doesn't really disadvantage you if you don't.