5 ms·

Things did get better globally, even if marginally for most, but at what price. If I take out a loan to live it up for a year, but then have no way of paying it

Things did get better globally, even if marginally for most, but at what price. If I take out a loan to live it up for a year, but then have no way of paying it back, because I haven't invested the money into anything substantial did things really got better for me? With the Industrial Revolution, and later the Green Revolution we began accumulating a debt. All the gains we made were borrowed against the future. This is not progress, this is ignorance.

neilwilson 4y ago
"If I take out a loan to live it up for a year, but then have no way of paying it back, because I haven't invested the money into anything substantial did things really got better for me?" Yes. Because those you spent it with must have, or you wouldn't have been able to buy anything with it. Therefore you caused things to happen that wouldn't otherwise have happened. Debt is one of human's greatest inventions. It's what allows us to ensure that the underlying currency - human labour time - isn't wasted because there is no call to use it today. Instead we have a currency - "here's a pig, owe me one" that causes a surplus to arise. Some people won't be able to fulfil that promise in which case it will, in advanced societies, be cancelled. That's what bankruptcy is for. The assets you used to secure the loan are then transferred to others. However the use of labour time in others to create the capacity to generate a surplus remains somewhere down the induced transaction chain. Debt is the magic by which money is created on demand. That causes information to be transmitted down the supply chain that causes the capacity to make more to arise. Which is why those societies that use debt are more advanced than those that chose to outlaw its use. They ended up with fewer days wasted in aggregate and more capacity to produce. Most people fulfil their promises since it is inherent in human society to do right by others. And quite a lot of people like holding the assets that represent the debt as a status symbol of how well they have done - whether they can actually really call in those promises or not.
- philipashlock 4y ago
  Ecological and resource extractive debt is not magic, they have limits and externalities that most financial systems don't fully account for in their balance sheets.
  - NovaVeles 4y ago
    This is something I have to remind people of all the time - usually I just get blank stares. Forget the dollars and cents tokens on wealth, they can and are manipulated but intentionally and unintentionally. How much energy and resources that gets us do we have? That is the real currency we have to work with. All the debt in the world means nothing if we cannot produce the goods with the token we produced assuming the resources would be there.
    - tick_tock_tick 4y ago
      > How much energy and resources that gets us do we have? Millions of years worth..... Like really of course you get blank stares it's not an issue that exists.
      - mdemare 4y ago
        While there is a vast amount of resources below us, the CO2 above us that's causing us so much trouble would form a layer of just 3.8mm (0.15 inch) of dry ice if it was all deposited on Earth's surface as a solid.
      - _benedict 4y ago
        Millions of years of what? We have maybe a few hundred years of helium if we’re generous with our assumptions and we’re literally squirting that into balloons and letting it float away into the atmosphere and off into space. It’s literally an unrecoverable loss. This is just one of the many resource limits we’re facing as a species, and this is how we address it today.
        alexvoda 4y ago
        Since you brought helium into discussion, why do we fill party balloons with helium? Just how great is the risc of filling them with hidrogen? I know it's flamable and leaks through many materials. But in the context of party balloons just how great is that risc? The quantity is very small. And no ones life depends on it. And in the case of fire, that quantity would burn almost instantly. I doubt it would even have the time to ignite anything other than another flamable gas.
- xmprt 4y ago
  I'm not sure I follow your argument. I agree that debt is important for society to function however taking on debt that you don't invest into yourself is literally ruinous and not in a hypothetical way - tons of people's lives have been destroyed by getting into too much debt that they weren't able to pay back. > Yes. Because those you spent it with must have, or you wouldn't have been able to buy anything with it This just means that the people that you paid have better lives but you haven't explained how things are better are better for yourself unless you have some way of paying that debt back.
  - neilwilson 4y ago
    You must have a way of paying the debt back, or you wouldn't have been able to obtain the resource you did on a promise. The people doing the deal with you accepted your promise to repay. They don't do that for the fun of it. Debt is just a way of spending things without selling them first. You can either borrow against your car to spend it, or you can sell the car to spend it. Either way if you consume rather than buying another car, then you end up with no car.
    - davisoneee 4y ago
      The financial crash would like to have a word with you. Many people gave 'resources' to people who couldn't afford the debt, because with many layers of obfuscation, and perverse incentives for mortgage providers, they made it look like many more people could afford it than actually could. Further...payday loans...loan sharks...people get money for things they can't afford, and can't realistically pay back, all the time.
      - neilwilson 4y ago
        And bankruptcy sorts all that out. That's why we have it as the reset mechanism. Capitalism without the threat of bankruptcy is like Catholicism without the threat of hellfire.
        marssaxman 4y ago

neilwilson 4y ago

"If I take out a loan to live it up for a year, but then have no way of paying it back, because I haven't invested the money into anything substantial did things really got better for me?" Yes. Because those you spent it with must have, or you wouldn't have been able to buy anything with it. Therefore you caused things to happen that wouldn't otherwise have happened. Debt is one of human's greatest inventions. It's what allows us to ensure that the underlying currency - human labour time - isn't wasted because there is no call to use it today. Instead we have a currency - "here's a pig, owe me one" that causes a surplus to arise. Some people won't be able to fulfil that promise in which case it will, in advanced societies, be cancelled. That's what bankruptcy is for. The assets you used to secure the loan are then transferred to others. However the use of labour time in others to create the capacity to generate a surplus remains somewhere down the induced transaction chain. Debt is the magic by which money is created on demand. That causes information to be transmitted down the supply chain that causes the capacity to make more to arise. Which is why those societies that use debt are more advanced than those that chose to outlaw its use. They ended up with fewer days wasted in aggregate and more capacity to produce. Most people fulfil their promises since it is inherent in human society to do right by others. And quite a lot of people like holding the assets that represent the debt as a status symbol of how well they have done - whether they can actually really call in those promises or not.

philipashlock 4y ago
Ecological and resource extractive debt is not magic, they have limits and externalities that most financial systems don't fully account for in their balance sheets.
- NovaVeles 4y ago
  This is something I have to remind people of all the time - usually I just get blank stares. Forget the dollars and cents tokens on wealth, they can and are manipulated but intentionally and unintentionally. How much energy and resources that gets us do we have? That is the real currency we have to work with. All the debt in the world means nothing if we cannot produce the goods with the token we produced assuming the resources would be there.
  - tick_tock_tick 4y ago
    > How much energy and resources that gets us do we have? Millions of years worth..... Like really of course you get blank stares it's not an issue that exists.
    - mdemare 4y ago
      While there is a vast amount of resources below us, the CO2 above us that's causing us so much trouble would form a layer of just 3.8mm (0.15 inch) of dry ice if it was all deposited on Earth's surface as a solid.
    - _benedict 4y ago
      Millions of years of what? We have maybe a few hundred years of helium if we’re generous with our assumptions and we’re literally squirting that into balloons and letting it float away into the atmosphere and off into space. It’s literally an unrecoverable loss. This is just one of the many resource limits we’re facing as a species, and this is how we address it today.
      - alexvoda 4y ago
        Since you brought helium into discussion, why do we fill party balloons with helium? Just how great is the risc of filling them with hidrogen? I know it's flamable and leaks through many materials. But in the context of party balloons just how great is that risc? The quantity is very small. And no ones life depends on it. And in the case of fire, that quantity would burn almost instantly. I doubt it would even have the time to ignite anything other than another flamable gas.
xmprt 4y ago
I'm not sure I follow your argument. I agree that debt is important for society to function however taking on debt that you don't invest into yourself is literally ruinous and not in a hypothetical way - tons of people's lives have been destroyed by getting into too much debt that they weren't able to pay back. > Yes. Because those you spent it with must have, or you wouldn't have been able to buy anything with it This just means that the people that you paid have better lives but you haven't explained how things are better are better for yourself unless you have some way of paying that debt back.
- neilwilson 4y ago
  You must have a way of paying the debt back, or you wouldn't have been able to obtain the resource you did on a promise. The people doing the deal with you accepted your promise to repay. They don't do that for the fun of it. Debt is just a way of spending things without selling them first. You can either borrow against your car to spend it, or you can sell the car to spend it. Either way if you consume rather than buying another car, then you end up with no car.
  - davisoneee 4y ago
    The financial crash would like to have a word with you. Many people gave 'resources' to people who couldn't afford the debt, because with many layers of obfuscation, and perverse incentives for mortgage providers, they made it look like many more people could afford it than actually could. Further...payday loans...loan sharks...people get money for things they can't afford, and can't realistically pay back, all the time.
    - neilwilson 4y ago
      And bankruptcy sorts all that out. That's why we have it as the reset mechanism. Capitalism without the threat of bankruptcy is like Catholicism without the threat of hellfire.
      - marssaxman 4y ago