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> those dollars are coming out of their bank account into mine every two weeks like clockwork Would it make you feel better to consider that those dollars aren
by owenmarshall 7y ago
> those dollars are coming out of their bank account into mine every two weeks like clockwork
Would it make you feel better to consider that those dollars aren't really coming from their bank account in any meaningful sense? They're almost always from a large creditor who extended a line of credit, or from the sale of unsecured debt against the company if you're big and bad enough. And that their "bank account" is almost entirely divorced from cash on hand, and it's built up from money other businesses and customers owe them for services?
We assume that businesses are going to be in business for the foreseeable future, that they'll pay their debts and collect profit on their assets and the world keeps moving. In that sense, corporate accounting isn't the smoke and mirrors; it's the way we give that assumption some basis in reality. We assume that your business will stay in operation and sell the product you helped build, so why penalize them for not being able to get money before the asset is built?
- TurkTurkleton 7y agoAh, yes. I always forget that the entire global economy is built on debt. That actually makes it worse, in a way, but at least it makes sense in context.