I think this almost certainly is not the reason. You can take something as simple as lotteries to show this. Lotteries specifically target and exploit lower income individuals who we can say are probably not 'professional investors.' And they're huge money. In 2016 $80.55 billion was spent on lottery tickets in state lotteries in the US. [1]

That's hundreds of dollars per person if each and every adult in the US bought exactly an equal share of all lottery tickets. In reality only x% of people play and the distribution is going to he heavily distorted. Lotteries are a major drain on society, but government's love the 'free' money. So we have them.

[1] - https://www.statista.com/statistics/215265/sales-of-us-state...

> You can take something as simple as lotteries to show this.

Lotteries explicitly and extensively inform the consumer precisely what their odds of getting a significant ROI are (namely "slim to none") and lotteries are heavily audited and regulated to make sure they deliver exactly those odds. When polled, those that play understand those odds for the most part and those who play the lottery compulsively understand that they have a problem, in spite of the compulsion.

A rather poor choice of analogy since I think all of us would be perfectly happy if these cryptocurrencies were managed the same way.

So I guess it's morally better to let people instead gamble their money on bitcoin casinos that are verifiably fair?

Where I live (in Canada), it isn't just the lottery. Some provincial governments run full-fledged casinos, and pocket the revenue from that. It can be quite easy to sink a great deal of money into casinos, and unfortunately, some do.

but people don't usually put their entire life savings into lottery. but may be they could with Bitcoins...

The data would beg to differ. You have to keep in mind the demographic makeup of the US. More than half of Americans have less than $1,000 in savings - total. [1] Only 15% of Americans have more than $10k saved. Now take that $80 billion figure from the lottery. There are currently about 245 million adults in the US. About 49% of Americans play state lotteries. [2] Now let's do the math. That's $80.55 billion / (245 million * 0.49) = $671 spent on lotteries on average!! It is very safe to say that there are alot of people spending all, or near all, of what could be their life savings on lottery tickets.

Lottery tickets are almost always negative expected value which means you're basically lighting money on fire, and governments worldwide love them. More generally the US government acts as an oligarchy. Government self interest, followed by special interests are what generally drive government action. Public utility (and opinion) play a very minor role. And yes, I even have a source for this as well as I understand this is not what many people want to believe. [3]

[1] - https://www.fool.com/investing/2016/09/25/how-much-does-the-...

[2] - http://news.gallup.com/poll/193874/half-americans-play-state...

[3] - http://www.princeton.edu/~mgilens/Gilens%20homepage%20materi...

Half of Americans have < $1,000 in their savings account - yes, that is true.

However, around 64% of Americans own their home [1]. How many of them are taking out HELOCs against their homes to buy lottery tickets? Once concern is people are taking out HELOCs for crypto speculation.

[1] https://en.wikipedia.org/wiki/Home-ownership_in_the_United_S...

I think that stat means 64% of Americans don't rent.

Homeowner is not the right term for most of that 64%, because most have a mortgage balance, which when subtracted from their < $1,000 in savings, makes the picture even uglier, and makes most of their future financial well-being dependent and correlated with their local real estate market.

Edit: The stat actually means 64% of homes are occupied by their owner. But "owner" is still misleading, as the article linked to above says:

"However, homeowner equity has fallen steadily since World War II and is now less than 50% of the value of homes on average."

I'm not saying that is a good situation or the picture is rosy. The real question here is one of semantics - do you include home equity in "life savings"? I would say yes. And using a HELOC for a crypto or lottery tickets are both bad things IMO.

I totally agree, just wanted to clarify that "homeowner" is a generous term in the US intended to make people feel like they own an entire home on the day they close the sale, instead of the reality that they usually own a mortgage balance along with a small chunk of that home.

I don't understand your point at all, what is stopping me from using my life savings on lottery?

You don't understand the point, or you don't agree?

Because to me it should be easy to understand that Lottery isn't marketed/treated as an investment (crypto has started to be legitimately treated as such), and historical returns don't suggest it would work.

Crypto is just attractive enough it could pull the wrong type of attention from everyday people acting as investors.

I don't agree with direct regulation, but I can definitely see why the government would be worried.

Why can't they? Surely they can indebt every person with accumulating govt deficits (currently 62k in the US) so what's different?

https://ycharts.com/indicators/us_per_capita_public_debt

I'm not on the hook for "my share" of the national debt. The government isn't going to knock on my door with a $62k tax bill next month. That's the government's debt, not mine.

If I spend all my money but still owe creditors more, that's what I'm on the hook for. That's real debt.

No, they won't knock on your door with a tax bill. Because it's easier to tax you through inflation to finance that debt:

https://en.wikipedia.org/wiki/Seigniorage#Seigniorage_as_a_t...

"Economists regard seigniorage as a form of inflation tax, redistributing real resources to the currency issuer. Issuing new currency, rather than collecting taxes paid out of the existing money stock, is then considered in effect a tax that falls on those who hold the existing currency."

Eh. But inflation only affects nominal assets like bonds and bank account balances. Real assets like houses or stocks (to a degree) would be expected to rise along with inflation.

That makes inflation distortionary, not some ideal tax on wealth. Governments can't just run away with inflation as an alternative to tax.

Because a) this debt at least pretends to pay for the comforts of their lives like infrastructure, security - and in some countries - education and healthcare; and b) national debt does not work the same way a private individual's debt works.

a)So taking on debt pretending to do something good is fine?

What if I say they do something bad with that debt too, is it still OK?

b) Interest rates are being paid for decades via taxes, money that could have been put to use much better. I'd say it's similar enough and don't think "it works differently" is an argument here

It works differently because the US can just issue more currency to pay off debt. Honestly sovereign debt is a currency manipulation / money supply tool more than anything.

Yes but sooner or later we all pay when they do that.

What does per capita public debt have to do with someone losing their life savings?

It's inconsistent that the govt "saves" you from losing your life savings yet indebts you with a nontrivial amount plus lifelong interest rate payments.

Put as question: how much would you like legally binding financial advice by someone up to their ears in debt?

I don't owe $60k because the USG has $60k in per capita debt. Nobody's coming to me for that. The mental gymnastics you need to go through just to equate the two is exhausting.

"Legally binding" and "advice" are mutually exclusive concepts. And it's 100% possible you can give great financial advice and be in debt. "Max out your 401k and a Roth IRA" is great advice in 99% of circumstances. Just because someone is paying off high interest credit cards instead doesn't make the advice invalid or their choice of priorities incorrect.

I can see where @dmichulke is coming from, nobody is going to come to your door looking for that money in the fashion you describe but you are paying for it one way or another. Who knows, maybe if the debt levels weren't so high the US would be able to afford a healthcare system like the rest of the developed world.

> Who knows

Anyone who has applied a modicum of thought to the issue. The US already has more per-capita public funding going to healthcare than any other nation, we simply don't get a good return on it because that is perceived as "socialism".

And pursuing a highly conservative fiscal policy (far off the right side of the Overton window) is not going to change that, nor advance the cause of said "socialist" policies. It's flabbergasting that you would suggest that as any kind of a reasonable cause-and-effect.

Because those people vote.