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Debt is a distributional issue. It nets down to zero as for each debtor there must be a creditor.
That's the NCE view.
Looking at it Dynamically, debt has Opportunity Cost(s) for the debtor since they have to make the interest payments. This reduces the amount of money they could spend on other things. Compound interest really socks it to the debtor as the stream-of-payments amounts to as much as 300% of the initial borrowing.
It wouldn't be so bad if this was recycled and circulated in the micro-economy. What happens is the lender takes the payments and loans it out again, creating compounding on compounding, creating a parasite/host predatory economic environmental relationship.
If the predation is not restricted the economy wanders to the right side of this:
graph and Things Fall Apart. She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
There need not be any drain from the debt at societal level. Of course, there will be plenty of "repayments" at societal level in the coming decades, mostly because we will have to divert huge resources into making our economies sustainable.
But with regards to the immediate situation (I know climate change has already wrecked many communities, but it is yet to have a major economics impact. Similarly, even at 100$ a barrel, oil remains pretty cheap), it did not have to be that way. It is a matter of choice. A choice that was clearly not made by, or at least in favour of (there is far too much support for crazy policies, after so much propaganda), the 99%. Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
Money is just the wrapper. You have to peel it off to reveal the naked predation underneath.
Some people enjoy risk. They enjoy being passionate about projects. They enjoy working 16 hour days trying to make something.
I think they're kind of insane, but it's obvious they exist, and they're not necessarily a bad thing.
But all that happens with lending is that someone decides to invest in a project because they think it's viable.
In practice this means believing they won't lose their stake, that they'll get more out than they put in, and that the social, cultural, domestic, and political environment will support the project.
But what profit means is that personal benefit outweighs social calculation. 'Investment' happens because it's personally profitable even though it's socially and culturally ruinous.
So the key idea that has to change is the concept of getting something for nothing. 'Risk' is just a bit of PR that dresses up the concept of investment as public decision-making performed with a view to getting more out than individuals put in.
What's missing is useful accounting of personal and social benefit and loss. Current terminology is biased towards the idea that individual returns are the only outcomes that matter. Reality-based economics would have to include wider social outcomes in its definitions of wealth.
In fact the most productive systems are likely to be ones where there's room for personal enterprise, but also enough control to make sure that political and financial power can never become so personally concentrated that they lock out other stakeholders from policy.
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