Imagine a family of 10 and only 1 working: <
Another way to look at it is: A family of four. Only one working.
bread winner e owes 1 million and he´s got to pay 20.000. In interest only. >
But we are not discussing an imaginary single family. We are counting actual people and actual incomes and actual debts.
Also, the principal doesn't need to be repaid as long as lenders keep lending, which they do. When I decide to hold no more US$, somebody else will buy them at a price which might or might not be higher than the current price. As the debts grow, the chance of repayment goes down so the interest rate required will go up.
In the oil industry, the refiners used to tell me BIG numbers to try to impress me with how expensive some proposal was, such as cutting volatility, reducing wax [in diesel] or increasing octane number. I would divide the cost up among the users so instead of $30 million it was cents per litre, or $ per motorist so that the benefits to the motorists would be comparable on an individual basis, which is how people think about their own lives.
Saying that "Umpty $trillion debt is a football field of fivers stacked to the top of the Empire State Building" doesn't enable anybody to understand the problem on a human scale. Calculating it per person puts the problem into perspective.
While the debt is $75 trillion more than I would take on, it's not instant catastrophe. Though it might be because people who are drug addicts, obese, alcoholics, spendthrifts, or otherwise out of control, are not noted for intelligent approaches to life. They just want another fix.
Mqurice |
