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But why does that make analogies to household finance invalid? It may also make sense for a household to take on debt if there is projected income growth. Als

But why does that make analogies to household finance invalid? It may also make sense for a household to take on debt if there is projected income growth. Also, isn't the accumulation of body fat the definition of a surplus, rather than a deficit? In both cases, having run a surplus in the past provides protection for when you must run a deficit in the future. Furthermore, are you suggesting that, a metabolic analogy is more correct than a household-finance analogy?

ArkyBeagle 10y ago
The Household Debt Fallacy is a specialization of the Fallacy of Composition. 1) The debt is eclipsed by GDP rise over time. 2) A government ( at least used to ) be able to very slightly weaken its currency to equalize for GDP and population growth. 3) Mild inflation acts to equalize the effects of private debt as well. I use the metabolic analogy because the risks of no body fat and low body fat are quite different, much as the risks of mild inflation and no inflation - or more accurately, deflation - are quite different.