All governments have debt. Why shouldn’t we?
I generalize. As I understand it, Hong Kong has miniscule public debt, something like 0.1% of GDP. On the other extreme, The U.S. has the highest debt of all countries in the world, but Japan has the highest amount of debt as a percentage of GDP.
So if countries live on debt, why shouldn’t we?
There are several things to consider here. Because countries have some capabilities that we as individuals don’t have.
Firstly, central governments can print money. That is not reasonable for the rest of us.
Secondly, governments have the capacity and ability to tax their citizens.
Thirdly, there are all sorts of ways that governments can manage and manipulate a country’s economy, and thus juggle its debt.
For these reasons alone, it is not really beneficial to compare ourselves to countries.
What About Us?
As individuals we become burdened and beholden when we are in debt. (Just like countries.) Some of our income must go towards satisfying our debt, leaving less for us. (Just like countries.) So, one way to look at the possibility of eliminating personal debt is to see being debt-free as giving one’s self the freedom to own all of one’s resources and income.
They Come In All Shapes and Sizes
There are all sorts of government entities. Aside from central governments and their departments, there are state and provincial governments, county and city governments, and many kinds of overlapping districts with various powers. Most are in debt. Most could not function without debt. Most need debt to exist because, sadly, the operations of government takes more money than the income they have or can get. (We could debate this last point at another time.)
A Model?
So while governments of all sizes seem to have debt, we as individuals do not need to look at government as a framework for our lives, at least in terms of finance. It is possible for the average person to reduce and then eliminate their debt. The first step is to stop borrowing additional money.
If debt continues to increase, then the likelihood of getting to the state of being debt-free diminishes greatly. Eventually we can get to the point of no return, where debt is so massive as to outstrip our ability to pay it off.
Stop
To avoid the condition of utter hopelessness and overwhelmedness, stopping debt from increasing is where to begin.
Changes
So even stopping the increase in debt would likely necessitate changes in one’s life. If we got used to using ever-increasing debt to live on, then just stopping would require changing how we live.
That is the first step. Some might say it’s the hardest step. It might be. But regardless of how hard or easy, simple or complex, it might be, it is the first step.
Take that first step.
The sculpture of the head of Gudea, ensi of Lagash, c. 2150 BC. found near Tello (Ancient Lagash), Iraq. Courtesy Cleveland Museum of Art.
The map of the north slope of Siberia is from Gentlemen’s Magazine, 1749. In the public domain. Courtesy Michigan State University.
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