DefiantDandelion on Nostr: The distinction exists between what debt is and what the unit of account is. Debt is ...
The distinction exists between what debt is and what the unit of account is.
Debt is not negative dollars. (Negative units) it is a promise to pay someone something in the future. So even though Charlie has a debt of 32 trillion dollars (a promise to pay someone 32 trillion in the future) it isn’t the case that Charlie has 0 or a negative number of dollars in his checking account.
Specifically if Charlie gets a 32 trillion dollar loan, that means someone gives him 32 trillion dollars today in exchange for charlie’s promise to pay it back in the future. So unless Charlie has already spent the loan he should have 32 trillion dollars in his checking account.
What Charlie has to give out as a loan to Alice is a secondary question unrelated to what Charlie owes someone in the future.
And why would Bob accept Alice’s payment when it comes from Charlie who owes 32 trillion? Because Bob isn’t getting paid with a promise to be paid in the future backed by Charlie who is at risk of bankruptcy. Bob is getting cash from Alice who borrowed it from Charlie. Where did Charlie get the cash to give to Alice. Bob doesn’t know and doesn’t care. what he is getting from Alice is non revocable. Alice has borrowed from Charlie but given what she has borrowed to Bob. Alice might get her legs broke if she doesn’t pay Charlie back. That’s not Bob’s problem. And if Alice’s failure to pay Charlie causes Charlie to be unable to pay back a portion of his 32 trillion debt that’s not Bob’s problem. Does that make sense?
Debt is not negative dollars. (Negative units) it is a promise to pay someone something in the future. So even though Charlie has a debt of 32 trillion dollars (a promise to pay someone 32 trillion in the future) it isn’t the case that Charlie has 0 or a negative number of dollars in his checking account.
Specifically if Charlie gets a 32 trillion dollar loan, that means someone gives him 32 trillion dollars today in exchange for charlie’s promise to pay it back in the future. So unless Charlie has already spent the loan he should have 32 trillion dollars in his checking account.
What Charlie has to give out as a loan to Alice is a secondary question unrelated to what Charlie owes someone in the future.
And why would Bob accept Alice’s payment when it comes from Charlie who owes 32 trillion? Because Bob isn’t getting paid with a promise to be paid in the future backed by Charlie who is at risk of bankruptcy. Bob is getting cash from Alice who borrowed it from Charlie. Where did Charlie get the cash to give to Alice. Bob doesn’t know and doesn’t care. what he is getting from Alice is non revocable. Alice has borrowed from Charlie but given what she has borrowed to Bob. Alice might get her legs broke if she doesn’t pay Charlie back. That’s not Bob’s problem. And if Alice’s failure to pay Charlie causes Charlie to be unable to pay back a portion of his 32 trillion debt that’s not Bob’s problem. Does that make sense?