RE: Anyone notice Blue states tend to me more fiscally responsible?
February 28, 2017 at 1:15 pm
That's because debt can be traded, held as collateral or resold provided ones finances are held in high repute.
Why use cash when you can leverage money-eating debt to do more work?
The circumstances where this system falls apart is in a catastrophic economic crisis and even then lenders often grant additional leeway to former best performer in hopes it is a temporary event and they will be able to rake interest payments.
Cash on hand, OTOH, trusts that the value of the currency will maintain itself against local low performing economic conditions. It falls apart spectacularly when the larger debt-based economies that support the same currency crash.
One can stand more on it's own merit (debt based) while the other parasitizes the national currency as a guard against poor performance.
Why use cash when you can leverage money-eating debt to do more work?
The circumstances where this system falls apart is in a catastrophic economic crisis and even then lenders often grant additional leeway to former best performer in hopes it is a temporary event and they will be able to rake interest payments.
Cash on hand, OTOH, trusts that the value of the currency will maintain itself against local low performing economic conditions. It falls apart spectacularly when the larger debt-based economies that support the same currency crash.
One can stand more on it's own merit (debt based) while the other parasitizes the national currency as a guard against poor performance.
Slave to the Patriarchy no more
