6 ms·
GDP is per year. Analogous to a person making $100k/yr with a $110k mortgage. Edit: Although perhaps not that analogous because is this even technically "debt"
by yeldarb 6y ago
GDP is per year. Analogous to a person making $100k/yr with a $110k mortgage.
Edit: Although perhaps not that analogous because is this even technically "debt"?
- ashtonkem 6y agoThe analogy has always been strained, since national debt just doesn’t work like personal debt. Also, when you can borrow at sub-inflation rates, there’s rarely an incentive to stop.
- RobertoG 6y agoIt's the Bank of Japan who decide the borrowing rates, so, not problem in that regard.
- eslaught 6y agoOk, but they don't control inflation. At some point, I think it's obvious that printing money becomes counterproductive. But where exactly is that line?
- deleted 6y ago[deleted]
- ashtonkem 6y agoThey don’t control inflation. But all of the warnings about hyperinflation being “right around the corner” have remained hilariously false. So who knows?
- WanderPanda 6y agoThey only control their inefficiency around an increasing trajectory
- RobertoG 6y agoThe Bank of Japan, can actually control inflation, because, as we have determined, they control the interest rate. Also, if necessary, the government could raise taxes and run a surplus to diminish inflationary pressures. But those are moot points, because the problem of Japan for the last 20 years has been deflation, not inflation. Despise that, as you can see in the comments here, there are people that still predict inflation in the future.
- RobertoG 6y agoIt's not debt, it's only a number that reflect the accumulate of past government deficits. A government is the issuer of the currency, so, nothing to do with the debt of a household or a business.
- isoskeles 6y agoWhat if we alter that analogy to a person who makes 100k/yr with a 110k mortgage, and next year they make 101k with a 115k mortgage, and next year they make 102k with a 120k mortgage, and so on?
- freeone3000 6y agoThen I think we should rename it from "mortgage" to "student loans". As long as they keep making minimum payments, this is technically fine.
- isoskeles 6y agoMisses the point, but sure, "student loans" is a fair comparison. The name doesn't matter to me, it's all debt. I don't see it as "technically" fine that the rate at which the debt grows consistently exceeds the rate at which the income grows. There comes a point in time in which the principal of the debt is large enough that minimum payments exceed income.
- erentz 6y agoThe US government doesn’t make 100% of GDP. GDP is $21 trillion. US government takes in $3.46 trillion.