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What happens in 2026? Is there a debt collector from a foreign planet coming then? By definition government debt equals net private savings (+/- exports). If t

What happens in 2026? Is there a debt collector from a foreign planet coming then? By definition government debt equals net private savings (+/- exports). If the private sector wants a surplus you have to have a government debt. The alternative, as seen on the chart, is to replace net private savings with welfare state programs.

zipdog 15y ago
>If the private sector wants a surplus you have to have a government debt. This seems to ignore the ability to add value. The sum of material possessions is determined by the amount the market would be willing to pay, but the market doesn't have to actually enact every transaction for that value to hold. So if I build a house, I still have the surplus value of a new house, even though the exchange of goods was only for raw materials. I get that technically money is either in the hands of the government or the people (or foreign entities) and so debt and surplus must match between these two (three) groups, but that does seem overly simplistic given that the worth of our material possessions increases as we had value to raw materials.
tbrownaw 15y ago
By definition government debt equals net private savings (+/- exports). This is bogus. Sure it's technically true, but it doesn't actually mean anything. If the private sector wants a surplus you have to have a government debt. There is no such thing as what's meant by a "surplus" here. There are two things that can be considered "saving". There is stockpiling useful things for your own later use, and there is collecting rights to other people's future work (which can be approximated by stockpiling your chosen medium of exchange). But when you consider net "savings" of an entire economy, rather than individual "savings" of individual people, there is no "other people" to collect future work from. The government can create more medium-of-exchange for people to stockpile, and it's recorded as a debt of the government, but it's entirely meaningless because there's nothing to exchange it for. The only way to have net savings -- deferring the benefits of current work -- is to stockpile those benefits in a warehouse somewhere for later retrieval.

zipdog 15y ago

>If the private sector wants a surplus you have to have a government debt. This seems to ignore the ability to add value. The sum of material possessions is determined by the amount the market would be willing to pay, but the market doesn't have to actually enact every transaction for that value to hold. So if I build a house, I still have the surplus value of a new house, even though the exchange of goods was only for raw materials. I get that technically money is either in the hands of the government or the people (or foreign entities) and so debt and surplus must match between these two (three) groups, but that does seem overly simplistic given that the worth of our material possessions increases as we had value to raw materials.

tbrownaw 15y ago

By definition government debt equals net private savings (+/- exports). This is bogus. Sure it's technically true, but it doesn't actually mean anything. If the private sector wants a surplus you have to have a government debt. There is no such thing as what's meant by a "surplus" here. There are two things that can be considered "saving". There is stockpiling useful things for your own later use, and there is collecting rights to other people's future work (which can be approximated by stockpiling your chosen medium of exchange). But when you consider net "savings" of an entire economy, rather than individual "savings" of individual people, there is no "other people" to collect future work from. The government can create more medium-of-exchange for people to stockpile, and it's recorded as a debt of the government, but it's entirely meaningless because there's nothing to exchange it for. The only way to have net savings -- deferring the benefits of current work -- is to stockpile those benefits in a warehouse somewhere for later retrieval.