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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,

• api 8y ago
  No. Good news is that it's not "real." It's numbers in a database. The stuff, knowledge, and experience that we have is real.
• zxcvvcxz 8y ago
  We'll just go to war eventually with someone.
• izzydata 8y ago
  I'm excited to see how all kinds of things unfold in the next 50 years. Supposedly max human population, running out of oil, icecaps melting, unsustainable amount of food production, dying ecosystems. The economy seems like the least troubling really as it is all superficial anyway.
  • rubidium 8y ago
    The climate and economy are the only real concerns. Human population, energy, and food production are on a good track getting better.
  • malux85 8y ago
    Me too! I think some things like “unsustainable food production” will probably slowly resolve itself with increases in automation and efficiency, but I do think runaway global warming will need a drastic solution. What other ones do you think will be hardest to solve?
    • izzydata 8y ago
      Too many humans is ethically unsolvable. There is that solution from the book Inferno where they (spoiler alert) release a chemical warhead of somekind that causes the majority of the world to become infertile. But try voluntarily convincing people they aren't allowed to have children. At least it is better than a war that kills off part of the population. We also use other limited resources in unsustainable ways even if it won't deplete in the next 50 years it is obviously inevitable. I hear about usable sand for construction being depleted at a rate faster than it is replenished.
    • TACIXAT 8y ago
      >runaway global warming will need a drastic solution I look forward to our subterranean future. I think the combination of vehicle automation and tunneling technology will allow us to build massive underground systems. If things get too rough on land, we can go below the surface.
      • lighthazard 8y ago
        So you're thinking Musk is using the Boring company to build huge underground living spaces?
      • politician 8y ago
        I secretly believe that for all of the bluster about Mars, Elon's real goal is to produce the technology base necessary for humans to live here on Earth following the collapse of the biosphere. Why go to Mars to encounter an atmosphere hostile to life when we can all collectively experience right here at home? Storms washed out your fiber optic cables? Starlink. No place to hide from the hostile surface? Boring Co. Need to remediate the atmosphere? Solar panels / Powersats -- I believe he's being reserved about Powersats. Need to move things around without easy access to transport? Electric vehicles. Need energy storage through the night time because the baseload power stations have all fallen into disrepair? Grid storage. Building your Gigafactory in a desert? Future-proofing.
        • btilly 8y ago
• miketery 8y ago
  It doesn't need to be repaid. It creates relationships, in the form of ownership or shared risk. Its why inflation is key and having control over interest rates and quantitate easing is such a powerful tool for managing all this. All this is not to say that it won't blow up in our face (in particular with perverse incentives where we continue to destroy on our environment).
  • deleted 8y ago
    [deleted]
• bb2018 8y ago
  I think many think articles like this intentionally make the numbers seem as scary as possible. Negative currency (debt) is a good thing for most people. It is what enables people to buy cars and houses or go to college. Of course, many individuals will get in over their head but on the whole it is a positive thing that individuals can take out mortgage and owe more on the house than they put down. The same goes for companies and governments.
  • throwaway98434 8y ago
    Exactly. Most people have significantly more than $86k debt in the form of a mortgage. I owe a lot more than $86k on the mortgage for my home. I have more assets than debt and I could pay off my mortgage but it's simply not the best way for me to spend my capital. Additionally, I suspect this article is using a median value for "average income" but a mean value for "average debt." This paints a misleading picture.
    • iscrewyou 8y ago
      So, speaking in terms of net value, you don’t have debt.
      • EpicEng 8y ago
        That's obviously not the angle this article takes though. Obviously there is more than enough assets to cover worldwide debt and one only goes into debt to obtain something of value. The context here is debt on paper excluding assets.
        • njarboe 8y ago
          And every debt is someone else's asset. I have a retirement plan that owes me money, that has US bonds, that I pay part of the interest on with my taxes. It is when the credits all pile up on the same group and they don't use it wisely, the world can get into a real conundrum that seems to only be solved by violence.
      • 8y ago
• james_s_tayler 8y ago
  At some point a jubilee will happen.
  • ghazak 8y ago
    Inflation (depending on the type and extent) can be a form of slow motion jubilee
  • sethrin 8y ago
    As I recall, there are few states which have never had an incidence of sovereign default.
    • njarboe 8y ago
      The USA is sometimes on that list, but confiscation of everyone's gold/(personal credit horde) in the 1930's seems to me to be even a bigger deal than a sovereign debt default.
• aurailious 8y ago
  > Does anyone actually still believe that these debts will all someday be repayed? I don't understand why you would ask this question. On the individual level its obvious that some debts won't be. It happens all the time for a lot of reasons. So I assume you aren't talking about the individual level. But on the macro level zero debt is a very bad idea and unless civilization collapses there will always be debt. Debt itself is a very good thing. Too much, and too little, of a good thing is bad. So in either case all debts being paid off will almost certainly never happen. > Does anyone even believe that the amount of debt will go down In absolute terms due to inflation it always goes up. > (that allows people to have negative amounts of currency) You say this like its a bad thing. Debt isn't a bad thing. Debt allows people to own homes and cars and pay for education and invest in business. Debt means you are optimistic about the future.
  • joobus 8y ago
    This reads like a person with Stockholm syndrome, captured by the Federal Reserve system. Money/currency does not have to be debt based. For a lot of America's history, it was not debt based.
    • isoprophlex 8y ago
      People downvoting this comment: please provide reasons for disagreeing. You are not adding to the discussion by silently downvoting.
      • pfranz 8y ago
        I started a reply, but honestly, I just don't feel like it's worth the energy to follow up with the replies I'd get. Probably because of the tone of the response. I don't see debt as all that much different than insurance. Sure, society can get by without it, and you may never need it, but society in general benefits. If I run a business any large expenses would be amortized over the lifetime of that thing. I could pay for it upfront, but that might never happen and if I could it wouldn't be the best use of my resources. Ideally, I'd "pay rent" in order to borrow money upfront, now that I have that machine it's easier to pay back since that fixed cost will benefit me for the next 20 years. That's the scenario where all debt is never paid back. Financial tools, like anything else can be good or bad depending on the circumstances and motivations at play. Payday loans (generally seen as bad) aren't all that different from micro-loans lauded in third-world countries. Let's say there's an older woman who walks out of town to buy goods and carries them back to town every day to sell (arbitrage). If she gets a small loan to buy more goods up front, invest in a wheelbarrow, or a booth at the market she can do more business and more easily pay off that loan benefiting; her, the person offering the loan, the sellers and the buyers--society in general. If she cannot pay back the loan she can get into a debit spiral. There are situations where that is beneficial to the person giving her the loan at the expense of her and the rest of society.
• dragonwriter 8y ago
  > Does anyone actually still believe that these debts will all someday be repayed? Approximately no one, in all of history, has ever believed that all debt on the globe would be repaid, so “still” is inappropriate. This is why we have interest, debt jubilees, bankruptcy laws, legal provisions for discharge of certain debt separate from bankruptcy, negotiated debt modifications (and laws which facilitate them), security for debt (and in some cases limitations on collections beyond the security) and numerous other current and historical features of society. > Does anyone even believe that the amount of debt will go down, rather than up, over the course of any length of time? Why should it? The number of people is increasing, as is their average economic output, as is (globally, and in long-term trend) lifespan. So real (much less nominal) aggregate debt can increase over time with no meaningful change to what the average person owes (and is owed) as a proportion of their expected future output.
• user5994461 8y ago
  Of course. The money supply increases monotonically out of thin air. Think of it. A few centuries ago, there simply wasn't $80000 dollar in the whole world. You'd be quite wealthy for having a single dollar.
• tvural 8y ago
  It's worth reading the Ray Dalio debt crisis book to see how this might end - the most likely scenario is the US, Japan, and EU all encountering cash flow problems in the next recession that they resolve by devaluing their currency. In that sense people have less money today than they believe. If all the major currencies and stock markets crash at the same time, there's no safe place for everyone to keep their money.
  • CoolGuySteve 8y ago
    A fixed or limited supply asset will hold its value against fiat currencies devaluing to some extent. Although it's likely that a scarce asset like gold/bitcoin is already artificially inflated by people who currently hold this belief. If those people then liquidate their scarce asset in order to acquire more fiat currency after a devaluation then the market glut will devalue that scarce asset too to some extent.
  • nostromo 8y ago
    And, of course, a devaluing would benefit people holding debt.
• z0r 8y ago
  Money is abstract labour. Debt is promised future labour. An individual cannot become wealthy in currency that retains meaningful value without others piling up implied debts. If you have saved money but no else has debt you can't compel anyone to work in exchange for your saved money. Debt is inherent to currency.
  • XorNot 8y ago
    This deserves more upvotes. This is the most succinct, tangible explanation I've come across recently.
• prostoalex 8y ago
  > how does a world where debt monotonically increases indefinitely work? The interest rate (and hence service payments) on such debt tends to rise. The lenders just price the possibility of distant default and demand fatter checks upfront. > Or does it eventually go kabloie? I am not sure all scenarios are as drastic as you describe. A bunch of countries have a privilege to issue debt in the currencies they themselves control and can inflate their way out of it. People who have paid up a portion of their mortgage can get interested in a HELOC, provided that the interest rates are attractive, or even buy a second house / rental property once the credit situation allows them. Their growing debt is not necessarily an indication of a bad balance sheet - they have tons of collateral and just choose to use the debt mechanisms when it makes sense for them.
• njarboe 8y ago
  For every debt there is someone holding it as a credit. Unless the lizard men space alien conspiracy is correct and they will come down with their space weapons to enslave us if we don't pay, this is just digits in a computer and can disappear in a wink of and eye (or revolution). As for the currency idea, that is already how dollars are created. A bank loans out money it owes other people and creates new money.
• jameslk 8y ago
  I asked a similar question on the Economics Stack Exchange. You may find this helpful: https://economics.stackexchange.com/questions/10007/will-major-economies-be-able-to-repay-their-debt https://economics.stackexchange.com/questions/10007/will-maj...
• jf- 8y ago
  I’m not an expert, but to hazard a guess, the debt allows financial institutions to extract money directly from government tax take. If I were them, I certainly wouldn’t want that debt to ever be paid off, and indeed to get higher, so that I could keep collecting rent from everyone else in society.
• perfunctory 8y ago
  > how does a world where debt monotonically increases indefinitely work? Assets also increase monotonically. One cannot talk about debt without talking about assets. You should look at the whole balance sheet. > debt has just become a standin for currency debt IS money. If all the debt in the world is repaid there will be no money.
  • posix_me_less 8y ago
    You would still have to pay taxes. Presumably, in money.
• lhh 8y ago
  What matters more than nominal amount of debt is the debt-to-income ratio. If people have income (or liquid assets) to cover their debt payments, things are fine. It's generally when that ratio gets large that problems arise. Also, debt is money. When you give me something of value, and I say I will pay you later for it, we have created money. A big part of the problem in down cycles is that lending drastically decreases, and there is therefore less money (broadly defined) in the system.
• joe_the_user 8y ago
  Does anyone actually still believe that these debts will all someday be repayed? This kind of rhetoric involves essentially a misunderstanding of our present capitalist system. Individual, organizations and government in the course of their existence, need to sometimes get access to more resources than they currently have. Borrowing for capital expenditures is the means to do this - issuing bonds, taking out mortgages and etc is the basic way this happens. This applies to houses, to bridges and to many other things. Since new, large expenditures happen even as other others are paid-off, of course all the debt is never paid. There's no reason for all the debt to be repaid, paying it all would be counter-productive. We could talk about the particular ways that debt and expenditures are done in this society (and boy there's a lot to talk about there). One big, problematic is imposing more debt on the personal level when it belongs on the state level (see student loans, "health care savings accounts" and other problems). But to begin the conversation, one has to understand how the broad economy works at all, how it's not equivalent personal values of honesty and thrift, etc.
• jklein11 8y ago
  >>Does anyone actually still believe that these debts will all someday be repayed? I believe that all debts will be repaid. They will either be repaid by the borrow or by the lender, when the borrow can't pay and the lender has to bail them out.
  • chewz 8y ago
    That's quite rare for debt to be repaid or defaulted upon. Most of the debt is usually just rolled over. Think credit cards, treasury bills, commercial bonds etc.
    • jklein11 8y ago
      Do you have any sources to back that up? I find it hard to believe that credit cards aren't either paid back or ultimately end in bankruptcy. It grows at ~20% per year!
• malmsteen 8y ago
  It just means "you need to work" to many people.at the end of the day ? At least thats how I see debt...
• pjdemers 8y ago
  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.
• Spooky23 8y ago
  Currency is at some level always debt by its nature.