National Debt - infinitely expanding

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Since the advent if neoliberalism in the US, real wages have been stagnant. Lost wage growth was compensated with credit to keep up consumption.
Not having personal debt is a good idea. But under capitalism, having a company that pays you a salary is great, and if that company has limited liability, it can be in debt as much as you like. That's how capitalism works: create a fake person (legally speaking) to take on debt for you!

Also: regarding states and public debt crisis:
Meh. The government can print itself out of any problem, inflating the currency. Then, only your personal savings will be destroyed.
So... Inflation is a mixed bag of a solution.

You are also not a country.

National debts are different to the debts of individuals for several reasons. If you try and think about them in the same terms then you will make mistakes.

Firstly, national governments are really big. If you don't get a mortgage then eh, that's one less house being sold, the only person who suffers from your high risk-aversion is yourself. If the government stopped taking on any debt then as soon as the tax take dropped (e.g. in a recession) there would be a horrific spiral as the government contracted spending, demand was sucked from the economy, tax take dropped again, so the government had to contract spending further... It would also basically become impossible for the government to invest in infrastructure - again, the government usually makes a profit on these investments - and it would discourage other long-term investments like education relative to immediate priorities like elder care.

Secondly, there's no reason to think that "ever-growing debt" is going to lead to eventual collapse. The reason people can't just ramp up larger and larger debts without getting into trouble is that people die. However, countries are only able to sell their bonds in significant quantities if there's no realistic threat of them "dying" any time soon. There's no reason to cut the debt as long as you are servicing the interest payments. The risk isn't "unable to pay debts", it's either "unable to pay interest on debts" or "nobody wants to buy your debt".

I'd also add, and this is a development of my first point in some ways, that even personal debt is not necessarily bad. It can make sense to take out a mortgage to buy a house while you're thirty and live in it for fifty years, rather than renting out a long series of tiny rooms in flats until you're fifty and finally have enough saved to buy a house to live in for thirty years. Obviously it is stupid to buy a second Ferrari on your third credit card, but it isn't stupid to get a loan that allows you to get a car so you can drive to the job where you'll earn more than the repayments on your car. It isn't stupid to get a business loan to allow you to start a small business with a strong business plan.

This is how I read that...

I agree with this, debt is not universally bad, however at some point the debt comes due. Having governments operating perpetually increasing debt is a poor design. At almost no point do governments go down to 0 debt, but there should be times when debt is decreasing.


For most of US history brief periods of heavy deficit spending were followed by long slow declines in debt. I suspect most other "successful" countries have a similar economic history.

In summary perpetual debt is not in of itself bad, but perpetual deficit is.

This is a good analogy! It's not entirely flawless but it puts it in terms that people can understand.

I wouldn't take out a loan to give to charity, but I might ask my employer for an advance in order to buy an annual train ticket. I'd then earn more money, and could theoretically give more to charity.