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A comment on Credit-Card Debt Nears $1 Trillion as Banks Push Plastic. Parent comment

Re:Credit-Card Debt Nears $1 Trillion as Banks Push Plastic by JonFish85 on Friday May 20, 2016 @02:13PM (#11740123)
Credit card debt probably isn't the "earliest" signal of that. We've been running pretty solid federal deficits for going on 40 years now -- that's probably a good indication that people feel that they deserve more than they pay for.
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Re:Credit-Card Debt Nears $1 Trillion as Banks Push Plastic by damptowel on Friday May 20, 2016 @02:24PM (#11740226)
Governments have been running deficits for 5000 years, it's how currency is established.
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Re:Credit-Card Debt Nears $1 Trillion as Banks Push Plastic by toomuchtodo on Friday May 20, 2016 @02:42PM (#11740389)
US citizens are binging on credit to make up for stagnant wages. That's not a theory, that's a fact. First it was housing, now its credit card and auto loan debt.

Fun fact: Subprime auto loan bonds are in a slow motion trainwreck:

http://money.cnn.com/2016/03/15/investing/subprime-unpaid-au...

http://www.bloomberg.com/news/articles/2016-03-21/this-is-wh...

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Re:Credit-Card Debt Nears $1 Trillion as Banks Push Plastic by mac01021 on Friday May 20, 2016 @09:50PM (#11742791)
You're asserting that, if wages were not stagnant, people would not binge on credit? Maybe that's true, but I doubt it's noncontroversial enough to be declared "fact rather than theory".
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Re:Credit-Card Debt Nears $1 Trillion as Banks Push Plastic by dionidium on Friday May 20, 2016 @02:58PM (#11740507)
Analogies from federal budgets to household ones are specious at best
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Re:Credit-Card Debt Nears $1 Trillion as Banks Push Plastic by mac01021 on Friday May 20, 2016 @09:53PM (#11742801)
Why? In both cases a deficit imposes a burden on our future selves or our descendants.
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Re:Credit-Card Debt Nears $1 Trillion as Banks Push Plastic by ArkyBeagle on Friday May 20, 2016 @11:27PM (#11743056)
Because presumed GDP growth eclipses the debt over time. They ran cool BILLIONS in terrifying debt in the US in WWII. Now? A billion is what a mid sized company costs.

And if you don't run any debt, it's like having zero body fat in cold climates. No insulation, and any caloric deficit causes much more severe problems.

Nobody said it had to be simple.

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Re:Credit-Card Debt Nears $1 Trillion as Banks Push Plastic by mac01021 on Saturday May 21, 2016 @09:53AM (#11744661)
But why does that make analogies to household finance invalid? It may also make sense for a household to take on debt if there is projected income growth.

Also, isn't the accumulation of body fat the definition of a surplus, rather than a deficit? In both cases, having run a surplus in the past provides protection for when you must run a deficit in the future.

Furthermore, are you suggesting that, a metabolic analogy is more correct than a household-finance analogy?

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Re:Credit-Card Debt Nears $1 Trillion as Banks Push Plastic by ArkyBeagle on Saturday May 21, 2016 @03:29PM (#11745836)
The Household Debt Fallacy is a specialization of the Fallacy of Composition.

1) The debt is eclipsed by GDP rise over time. 2) A government ( at least used to ) be able to very slightly weaken its currency to equalize for GDP and population growth. 3) Mild inflation acts to equalize the effects of private debt as well.

I use the metabolic analogy because the risks of no body fat and low body fat are quite different, much as the risks of mild inflation and no inflation - or more accurately, deflation - are quite different.

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