One person’s debt is another person’s asset.
Only if they make good on the debt though. It's conditional. It's not like having hard assets, like land or material goods or resources.
A deficit, on the other hand, is a short term imbalance between revenues and expenditures. There is absolutely nothing wrong with governments running deficits to correct for a bad economic climate, so long as they balance these deficits with surpluses when the economy is doing well.
But they're not short term, and they don't balance them. They're like heroin. Once they get hooked, they're hooked. If heroin wasn't addictive, it would be amazing. Deficit spending is the same. What government isn't a deficit junkie? Debt must be paid back.
This whole system of debt/investment is the basis of modern economic development.
That doesn't preclude other systems though, and it doesn't preclude better systems. e.g.
The Venus Project is a resource based economic model. Just an example there.
Government debt is what puts money into circulation.
I don't get that. Governments put currency into circulation. People create wealth then use the currency to trade for wealth. e.g. Farmers grow produce -- new wealth. Manufacturers transform raw materials into new products -- new wealth. Musicians entertain -- new wealth. (The entertainment industry is kind of hard to pin down like all services and IP.)
Financial systems are grease in the machine to transfer wealth. They do not create wealth. Well, some people believe that they do, but that doesn't make it true. The grease has a cost associated with it, and so it has some value, but the way the system works now, it's as though the grease IS the wealth. Give me an apple to eat and a knife to cut it -- you can't eat grease.
Whatever has value after the
Zombie Apocalypse is wealth. Whatever does not have value after the Zombie Apocalypse is not wealth. Money won't have any value after December 21st, 2012 when the Zombie Apocalypse hits. Well, except maybe here in Australia because we're so remote and the Zombie Apocalypse may not hit here... But you're all screwed in the US as that's where just about every Zombie Apocalypse hits in the movies.
But seriously --- the Zombie Apocalypse test for wealth works. Currency and financial systems are not wealth, except in some deluded fantasy. They are tools to transfer wealth. Grease. They ease/facilitate the conversion of apples to oranges. For example, take some video game where points are dollars. They are worthless except inside of the video game where they have value, i.e. they are worthless outside of the system.
Our current system seems very broken, e.g.:
The problem the US faces now is that it ran deficits during the boom years 2000-2007, which was a political choice to reduce taxes, mostly for the benefit of the very wealthy. These are the same people who now want to slash expenditures so that they don’t have to give back any of their gains. Doing so would make permanent a well documented transfer of wealth from the poor to the rich over that period.
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