4 ms·

Why is the analogy of citizen debt false?

by brink 5y ago

kube-system 5y ago
For one, people have different stages of their life. People, at some point, no longer earn income, and so, it makes sense to plan your debt within your lifecycle of income generation. While you may retire or die some day, there is no date at which the US government stops taxation. The whole idea of "paying back a loan" really only makes sense in the context of a borrower who has limited time to do so. Secondly, when you borrow money, you borrow it from other people. Most US debt is in the form of treasuries issued to American people and businesses. The people offering the loans to the US government are the often same ones benefiting from it. It's less like "buying a pizza on a credit card" and more like "lending my wife $20 to pick up groceries for dinner". Thirdly, the US government controls monetary policy. If you want rack up debt on your credit card, you have to pay the interest rate that the credit card company wants, and you have to pay it in the denominations they ask for. The US government controls the monetary supply and the interest rate at which they obtain debt. And there are many more differences, like the fact that institutions trust storing their wealth in debt issued to global nuclear powers, more so than they trust issuing it to the average Joe on the street.
dlp211 5y ago
Because it tries to rationalize or equivocate government debt with household debt. They are not the same for a whole bunch of reasons. But lets go with this equivocation for a moment. It ignores an incredibly significant part of the equation to the affordability of debt. It always ignores the fact that the US is worth in excess of $200+ Trillion dollars and that combining all debt (personal, government, business) and getting an accounting of the Net Worth of the United States comes in around $141+ Trillion. That is, we have a debt equal to our income and assets many multiples our current debt and income levels. I have a mortgage that is a multiple my income, so the US is doing much better than myself and I am quickly ascending the Net Worth ladder despite this debt. It also ignores the fact that this money --specifically money spent directly on the welfare of citizens-- is investment in said citizens in order to continue to grow the wealth and prosperity of the country as a whole and keep us competitive with the rest of the world. It makes zero sense NOT to improve the lives of as many American citizens as possible in a global economy.

Why is the analogy of citizen debt false?

by brink 5y ago

Why is the analogy of citizen debt false?

For one, people have different stages of their life. People, at some point, no longer earn income, and so, it makes sense to plan your debt within your lifecycle of income generation. While you may retire or die some day, there is no date at which the US government stops taxation. The whole idea of "paying back a loan" really only makes sense in the context of a borrower who has limited time to do so. Secondly, when you borrow money, you borrow it from other people. Most US debt is in the form of treasuries issued to American people and businesses. The people offering the loans to the US government are the often same ones benefiting from it. It's less like "buying a pizza on a credit card" and more like "lending my wife $20 to pick up groceries for dinner". Thirdly, the US government controls monetary policy. If you want rack up debt on your credit card, you have to pay the interest rate that the credit card company wants, and you have to pay it in the denominations they ask for. The US government controls the monetary supply and the interest rate at which they obtain debt. And there are many more differences, like the fact that institutions trust storing their wealth in debt issued to global nuclear powers, more so than they trust issuing it to the average Joe on the street.

dlp211 5y ago

Because it tries to rationalize or equivocate government debt with household debt. They are not the same for a whole bunch of reasons. But lets go with this equivocation for a moment. It ignores an incredibly significant part of the equation to the affordability of debt. It always ignores the fact that the US is worth in excess of $200+ Trillion dollars and that combining all debt (personal, government, business) and getting an accounting of the Net Worth of the United States comes in around $141+ Trillion. That is, we have a debt equal to our income and assets many multiples our current debt and income levels. I have a mortgage that is a multiple my income, so the US is doing much better than myself and I am quickly ascending the Net Worth ladder despite this debt. It also ignores the fact that this money --specifically money spent directly on the welfare of citizens-- is investment in said citizens in order to continue to grow the wealth and prosperity of the country as a whole and keep us competitive with the rest of the world. It makes zero sense NOT to improve the lives of as many American citizens as possible in a global economy.