Capitol Hill Blue Forums Thread Like Summary - The Debt Ceiling

There is no such legal thing as the Debt Ceiling

In fact, U.S. debt is a key investment vehicle.

I think this explanation is correct. If the debt is incurred through good investment and results in benefits to the American citizenry and innovation, why not?

Debt is, I think, a very poorly understood concept. How it became the basis for an economy is really a manifestation of dark sorcery - a confidence game of epic proportions. It is, just like money, a representation of agreement - not a tangible thing, just an agreement. And like all agreements it can be changed, either by new agreements, or by rude force.

In simplest form, debt is negative money - an expression of indirect barter. Money (including negative money) is a tool for increasing the flexibility of barter from direct trades - “I’ll give you eight boards for a ham and a pound of bacon” - to indirect, multiparty, elapsed time trades. Barter, too, is based on agreements (how many boards is a ham worth?)

What happens to an agreement when one (or all of the parties) dies, or otherwise disappears? The agreement evaporates.

It seems to me that debt, and in a similar way money, have become very narrow and selfish concepts as commonly applied, tending to obstruct natural and good acts like some kind of zombie spell.

When people band together in societies, which create governments - because, as it happens, people need to be governed because most of us are incapable of understanding and believing rationally and functionally in the common good. Often the common good isn’t directly good for everyone at the same time, but when evaluated in a lifecycle context the common good should lift all boats. As individuals, we are generally not skilled at working for the common good universally.

So we come to this notion of National Debt, what is it, exactly? First, it is debt because as a whole society we can’t summon the collective consciousness to pay up front for the common good. And sometimes the “common good” is actually narrow minded selfish splurging on things that don’t result in positive benefit (think invading Iraq or tax cuts for the rich). Con artists and bullies have their tricks for putting lots of uncommon good expenditures on the Community Credit Card, things which produce a negative return on investment, driving the debt ever up and up.

But debt owed to whom? The crazy debt has accumulated through a complex web of agreements, many of which were not all that agreeable - but now we want the context to be simple and straightforward. We have come to hold debt on a sacrosanct pedestal on the one hand, “Debts must be repaid!” But on another hand we use debt as a basis for our entire economy, completely oblivious to the variety of honest or nefarious origin or purposes behind it.

But in the end, debt is still just an agreement, and agreements are changeable.

Now, things like climate change, pumping aquifers dry, depleting the soil, killing off of species - those are real debts. No way to replenish those stores of wealth once they are used up. What we need to agree upon as humans is to eliminate that global debt.

Golly…

The difference between a subsidy and an investment is a subsidy keeps something alive that would likely die without external support. An investment is supposed to result in benefits that exceed the initial cost.

If we could be rational and logical about what to invest in, then using debt for investment purposes makes sense. But return on investment has to be about more than money, and costs cannot be externalized.

As. nation, we should invest in honest lifecycle analysis modeling and make that a legislated requirement for expenditure decisions.