Debt is a vast, sucking field of muck, and we're all flailing to get out: Neil Macdonald

Unrepayable lifetime debt now seems to be a business model. Students enter the professional world owing hundreds of thousands, and otherwise sane people carry heavy credit card balances, with the usurious vig that comes with them. (Graeme Roy/The Canadian Press)

It has been said that the debt is a vast and sucking mud field from which everyone struggles to get out. Therefore, logic dictates that there will be a price to pay for all this. The account will expire.

It is important to mention that a government economist sent an email a punishment recently. In the same, although I use the most educated language possible, characterized the columnists, who worry about the endless accumulation of public debt as uncultured. While in the same way they consider that they need an introduction to the basic economy.

He accurately advised, “As a currency issuer, the Government of Canada can never run out of money and can finance each of the social requirements it faces, including free education.” There is no limit to the ability of a sovereign government to pay debts denominated in their own currency”.

In this way, he also added an introduction to the Modern Monetary Theory (MMT), which postulates that the government, not individuals or corporations, owns the national currency, and can print unlimited amounts of it without damaging consequences, as long as the rate is enough. Back to keep spending under control and curb inflation.

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It is already well known that the MMT school has existed for more than a century. However, it is considered that it seemed less crazy after Western central banks responded to the 2008 financial crisis by printing billions of dollars, euros, and yen without moving the needle of inflation. Meanwhile, at the other end of the philosophical spectrum are the Germans, whose leaders have read Faust by Johann Wolfgang von Goethe, and consider unorthodox theories with an aggressive suspicion.

On the other hand, it is necessary to inform that Statistics Canada has said that household debt grew faster than income in the fourth quarter. As such, the debt seems like a vast and sucking mud field in which the citizens stagger, since the unpayable life-long debt now seems to be a business model.

Similarly, Canadian statistics ensure that Canadians have a total debt load of 179 percent of their disposable income. That is the current level and still, it continues to increase.

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Source: Neil Macdonald | CBC News