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what dynamics exist that this is the primary problem to address, rather than being able to generate spare cash to invest in the first place?

• tracker1 8y ago
  By nearly every standard in the world, people in the United States are very wealthy. People in the U.S. also extend themselves into huge amounts of debt, most of which is avoidable. I'm not saying it's the primary problem, I'm pointing out that wealth isn't created solely on the backs of labor.
  • clairity 8y ago
    we're talking about slightly different concepts. i'm referring to the federal reserve creating currency (which is a type of debt)--in theory, the fed was created to print precisely enough money to account for the value generated by our cumulative labor, so that we have that well-accepted paper medium to exchange with each other rather than having to barter for everything. you're talking about consumer debt, which still represents labor, but it's borrowed from others (or from the future). of course when you borrow to buy depreciating assets, that lowers your personal wealth (you're basically throwing away value). its interest that creates value from capital rather than labor, ostensibly as a reward for risk-taking, but also to account for the time value of money (and its cousin, inflation). this is why the wealthy care so much about interest rates.
    • tracker1 8y ago
      Sorry, I misread original comment I was replying to. I don't think we're at disagreement after re-reading the first part.