Brilliant Martin, I have been struggling to work out why 1% - 5% of the world's wealthiest own at least 95% of the world's wealth. It is all in private debt which now makes sense and explains why Trump wants to pass a Bill that increases the National debt by 7 trillion dollars. Unfortunately he is screwing everytning up for the MAGA people if Wall St crashes.
It’s a huge challenge Frances. Those at the top have spent decades insulating themselves from social responsibility.
The only way there is any chance of addressing this issue would be a landslide election victory by Democrats with a veto proof majority in the Senate, so you can reset the ground rules.
My bigger concern right now is the U.S. defaulting on its debt obligations. I’d love to know the Fed’s strategic thinking right now.
I still don't understand this notion of the national debt being a good thing, even if it's only good for the top 1%. My notion of debt is that you eventually have to pay your debt. Interest is compounded against the debt you owe over time creating more debt for you to have to pay, and eventually debtors can call you on that debt. It also hurts your credit score not to pay your debt in time. How can this be a good thing fir anyone?
I think it maybe for the same reason as most people wouldn't be able to afford to buy a house if they could not take on debt responsibilities. Debt is not a bad thing per se. But concentrated in a very few hands, like most things, is not good. Modern economies are built on debt. It's just about who owns it and reaps the benefit from it. If that benefit were more widely shared, so that inequality was reduced, as it was for a while, we wouldn't now have people who feel so excluded from our economies voting Trump and Brexit and turning on minorities at the urging of populists. Think of debt as an asset which earns an income that the owner doesn't have to work for. At one stage in our recent history I think I am right in saying that governments held more debt as a proportion of the total. Or certainly the creation of private debt (by banks) was strictly controlled, if I remember my O and A level economics correctly. And of course governments are there to use that debt asset for the greater/common good rather than hoard the income from it for the state. i.e to use to spend on public services... Someone else will tell me if this holds together and makes any sort of sense.
Brilliant Martin, I have been struggling to work out why 1% - 5% of the world's wealthiest own at least 95% of the world's wealth. It is all in private debt which now makes sense and explains why Trump wants to pass a Bill that increases the National debt by 7 trillion dollars. Unfortunately he is screwing everytning up for the MAGA people if Wall St crashes.
Hi Martin ,
How do we the voters pose this question to Congress , why or how can the private debt owned be collected ?
I understand taxi the wealthiest but what are the ways to collect on the private debt where it counts ?
Thank you
Frances
It’s a huge challenge Frances. Those at the top have spent decades insulating themselves from social responsibility.
The only way there is any chance of addressing this issue would be a landslide election victory by Democrats with a veto proof majority in the Senate, so you can reset the ground rules.
My bigger concern right now is the U.S. defaulting on its debt obligations. I’d love to know the Fed’s strategic thinking right now.
Thank you for the response .
Very helpful analysis. The inequality has gotten so much worse here since Reagon.
Excellent information thank you very much!!
@garyseconomics
Thank you! This will be a great reference for others to hear!
I still don't understand this notion of the national debt being a good thing, even if it's only good for the top 1%. My notion of debt is that you eventually have to pay your debt. Interest is compounded against the debt you owe over time creating more debt for you to have to pay, and eventually debtors can call you on that debt. It also hurts your credit score not to pay your debt in time. How can this be a good thing fir anyone?
I think it maybe for the same reason as most people wouldn't be able to afford to buy a house if they could not take on debt responsibilities. Debt is not a bad thing per se. But concentrated in a very few hands, like most things, is not good. Modern economies are built on debt. It's just about who owns it and reaps the benefit from it. If that benefit were more widely shared, so that inequality was reduced, as it was for a while, we wouldn't now have people who feel so excluded from our economies voting Trump and Brexit and turning on minorities at the urging of populists. Think of debt as an asset which earns an income that the owner doesn't have to work for. At one stage in our recent history I think I am right in saying that governments held more debt as a proportion of the total. Or certainly the creation of private debt (by banks) was strictly controlled, if I remember my O and A level economics correctly. And of course governments are there to use that debt asset for the greater/common good rather than hoard the income from it for the state. i.e to use to spend on public services... Someone else will tell me if this holds together and makes any sort of sense.