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What does this mean exactly? "Indebtedness should never exceed obligations." Isn't indebtedness an obligation? So are they not the same thing?
by hattmall 1y ago
What does this mean exactly? "Indebtedness should never exceed obligations."
Isn't indebtedness an obligation? So are they not the same thing?
- Jtsummers 1y agoWhat it's legally obliged to do (or spend, in this case). In many countries, there's obligatory spending and discretionary spending. His perspective (per this, never read about him before) was that you should not take on more debt than is actually required to meet the obligations. Skip the discretionary spending if it would lead to debt. For a household analogy: If you have $50 in the bank and a $100 electric bill, go $50 into debt. If you have $50 in the bank and want to go to a dinner that will cost $100, skip the dinner. > Isn't indebtedness an obligation? So are they not the same thing? Indebtedness is a consequence, paying off debts can be an obligation.
- wahern 1y agoThe obligations in this context were war reparations. Basically, Luther would permit issuing bonds to pay reparations, but not for counter-cyclical government investment. Germany had been experiencing significant deflation when the Weimar Republican collapsed, which exacerbated unemployment. The rise of Hitler wasn't because of the infamous hyperinflation a decade earlier, it was because of overly fiscally conservative economists like Hans Luther. Ironically, I think Hans had just oversawn the issuance of bonds for the final traunch of war reparations repayments when he was ousted. The Americans (for a second time) had helped negotiate a settlement with France to minimize the devastating effect of reparations on Germany. I think this Atlantic series (part book shill) is trying to draw parallels with Trump's administration. But it's doing so clumsily, twisting history to make a point.