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Debt is about trust. Japan has the highest debt to gdp ratio, but that’s not a problem because we trust it. With enough trust you can go pretty far. There are a

Debt is about trust. Japan has the highest debt to gdp ratio, but that’s not a problem because we trust it. With enough trust you can go pretty far. There are a lot of trust factors for the US, like its military or the petrodollar.

Sutanreyu 8y ago
Trust, in an economic sense, is how much material is being dedicated towards a corporation's future existence... A corporation can be an individual, or a company of individuals...
- CamTin 8y ago
  Trust in this context means "If I loan you money, how skeptical am I that you'll pay it back?" I can be skeptical for a number of reasons, from the simple notion that I think you are just a crook and have no intention of paying back, to more directly economic ones like the fact that I know you've got no real prospects to make back enough money going forward to stroke the interest on my loan. There are shades in-between, like if I know you intend to pay back the loan and can technically afford it right now, but your credit is bad all over town and you're one bad break from being totally and irreparably insolvent. If you're family or a close friend, I might loan you money without seriously expecting to get it back (though in these circumstances I personally just recommend just making it a gift). By "how much material is being dedicated toward...[it's]...future existence" you presumably mean how much the firm or individual is investing in relation to their income or some similar measure. That can be part of it, but definitely isn't all of it. All market transactions are, contrary to the technocratic worldview of mainstream political economists, human transactions. The actual underlying human relationships matter, and the balance sheets only matter inasmuch as they facilitate communications between actual people.
valuearb 8y ago
Trust can disappear very quickly when you can’t pay the bills. So does the value of the dollar and most of that military.

Sutanreyu 8y ago

Trust, in an economic sense, is how much material is being dedicated towards a corporation's future existence... A corporation can be an individual, or a company of individuals...

CamTin 8y ago
Trust in this context means "If I loan you money, how skeptical am I that you'll pay it back?" I can be skeptical for a number of reasons, from the simple notion that I think you are just a crook and have no intention of paying back, to more directly economic ones like the fact that I know you've got no real prospects to make back enough money going forward to stroke the interest on my loan. There are shades in-between, like if I know you intend to pay back the loan and can technically afford it right now, but your credit is bad all over town and you're one bad break from being totally and irreparably insolvent. If you're family or a close friend, I might loan you money without seriously expecting to get it back (though in these circumstances I personally just recommend just making it a gift). By "how much material is being dedicated toward...[it's]...future existence" you presumably mean how much the firm or individual is investing in relation to their income or some similar measure. That can be part of it, but definitely isn't all of it. All market transactions are, contrary to the technocratic worldview of mainstream political economists, human transactions. The actual underlying human relationships matter, and the balance sheets only matter inasmuch as they facilitate communications between actual people.

valuearb 8y ago

Trust can disappear very quickly when you can’t pay the bills. So does the value of the dollar and most of that military.