It’s really simple you owe it to the future
Uranus
That’s Uranus to you sir!
So if country A owes Country B $1B and country B owes Country C $1B and country C owes Country A $1B can’t we all just agree to erase that $3B in debt?
Better to pay it with a credit card so we can get the points.
This could be an interesting subject to research. Tracing just how much of the world’s debt can be wiped based on debt loops.
One problem you’ll run into is debt priority; essentially who your invalidated debt should be paid to before someone else. In theory you really wouldn’t run into too much of this but small sums of money have started greater wars.
One other issue is that in reality, debt is a good thing to hold over others for political power. There is money to be earned from interest and there is also a credit history in holding debt with a nation you are friendly with. Debt for individuals is bad. But debt for countries is a tool for all parties involved to benefit from.
Just spliit.app that shit
Future generations.
The best we could all do would be pooling money together to pay off debt.
Every time a debt was closed, that amount of money would just vanish of the economy.
That is the basics of fiat currency. We base our global economy on implicit trust, which is good, but the bad agents in the system are quick to corrupt it and here we are.
Read Capitalism: The highest stage of imperialism
Assets, and net (after deducting debt) assets, are positive. Banks are big debt holders.
Money doesn’t work for governments the same way it does for people and households. Money is the “blood” of the economy. It needs to get introduced to the economy and it needs a way to be taken out of the economy (taxes, which also function as the “incentive” for even using the currency in the first place).
Governmental debt can’t all be lumped into one mass. Do you owe the debt in your own currency or another country’s currency? In the case of the former, it’s not really debt.
Forcing countries to trade in a currency it can print more/less of at a whim is a key part of how the US maintains global supremacy.
Two economists are walking in a forest, when they come across a large pile of shit.
The first economist says to the other “I’ll pay you $100 to eat that pile of shit.” The second economist takes the $100 and eats the pile of shit.
They continue walking until they come across a second pile of shit. The second economist turns to the first and says “I’ll pay you $100 to eat that pile of shit.” The first economist takes the $100 and eats a pile of shit.
Walking a little more, the first economist looks at the second and says, “You know, I gave you $100 to eat shit, then you gave me back the same $100 to eat shit. I can’t help but feel like we both just ate shit for nothing.”
“That’s not true”, responded the second economist. “We increased the forest’s GDP by $200!”
They liked eating shit and watching others eat shit yet even more.
This is the problem any time the news talks about countries’ debts.
The answer is others of us. The government wants to build a canal or something, but they don’t have room in their budget. So, they make some bonds that say we give them $100 today, they give us $105 in 5 years, and a bunch of people buy them and now they can finance their project.
And who are they in debt to? Us, the people who bought the bonds and who they have to pay back later.
And if some of the buyers if that investment was China, then you could say the government is in debt to China. Sometimes if just normal Chinese people buy it, the news will report the government is in debt to China, or “owned by China”, even though it just got some money and owes some money to normal Chinese citizens who just took a solid-looking investment.
And if one person buys such investments from two countries, or is part of a mutual fund that does, then perhaps they may own hundreds in dollars of debt from two countries.
So I assume in this case they took the debts of various countries and added them up. But the answer of who the governments are all in debt to is us, normal people, and also banks and investors and other governments, etc.
This is also why taking about a country’s debt is often more complicated than people think. Because when I go into debt on my credit card or whatever, that’s bad because the credit card company starts feeding on me.
But when a properly functioning government goes into debt, it’s to me! What I get out of it is a bridge or train or something now, greater economic opportunities associated with that, and then also I get my money back later with interest, so it gives me a reliable way to grow my own money. Or, like I said, for banks or investment firms on my behalf to use these tools as some of the tools in the box to grow both my and their money.
It’s only a problem when the debt gets to the point that it doesn’t seem like the country will be able to pay it. Or, similarly, when the investment in infrastructure doesn’t produce enough extra value to fund this repayment.
But again, when a government is in debt, it’s in debt to investors who are using that debt to grow their money while the (well-functioning) government is using the money to grow the country.
Well put. This is also why they can’t just cancel one debt against another in a lot of cases. If country A has sold $1t of bonds to institutions in country B, and country B has sold $1t of bonds to institutions in country A, both countries are in debt to the other for $1t, and it would be in the benefit of both countries to cancel those out so they can stop paying the coupon on them, but they can’t because different parties have issued the debt and own th£ other countries debt.
It’s also a problem when the nation just refuses to pay the debt.
Future generations
Me
Each other as that is what collective debt is and there is nothing wrong with it.
Money is a fake meaningless construct anyway. It has no value. You can’t produce a duplicate rock from a ditch yet you can apply “mathematics” and change a dollar bill to two dollar bills! If it defies physics it ain’t real. Yet, it is the be all and end all of our existence???
Because direct trade and barter stopped making sense centuries ago.
https://en.wikipedia.org/wiki/History_of_money
Bartering was never the primary source of trade, and in prehistory, gift economies and sometimes loose concepts of debt occurred, while bartering was limited to potentially just strangers and enemies. The prehistory section is quite interesting here.
It seems that after prehistory during the formation of agriculture, instead of going to a barter based economy, “ledgers” were kept instead, which introduced the concept of debt and credit.
Note: I am not an anthropologist.
it’s almost as if we figured out money made the most sense thousands of years ago
Although weren’t currencies tied to a physical good for value until very recently?
Yes, and we stopped doing that because it made the system less stable
Yes, not centuries. When large societies were formed with trade amongst strangers becoming more common, money and/or ledgers were created to keep track of specific amounts of debts and credits. There was also never a point in time in which bartering was the primary system of economics.
Arguably millennia ago? There has always been some degree of bartering that will never fully disappear, but money has been around for a long long time in basically all cultures
Sounds like a US problem
Though US is the one country that doesn’t have a problem. It can just keep taking more loans.
This used to be true, but that era ended last year. It’s a trust thing, and the us has less credibility than they used to
That might be true. There might be some even more unstable times ahead.
