The High Cost of a Society Riddled With Debt

Whether for nations, businesses, or consumers, debt is highly marketed and highly utilized. While debt is a core driver of business success, the extent to which it is used is actually extremely harmful and is a market inefficiency driven by government incentives. The choice to embrace debt made by almost every modern nation has trickle-down effects that harm businesses and consumers. 

National debt is almost never an investment. Unlike business debt, it has no clear plan to make itself back. It is justified through promises of various benefits, but rarely if ever do those benefits have a clear path to recovery of the debt. Once the benefits of the debt have been enjoyed, the debt becomes buried in a great heap where it continues to grow. The behavioral economic arguments for this problem with debt are clear. Time inconsistency in favor of enjoyment in the present and a small addition to an already large national debt make adding debt all too easy. Even though a country could still exist without providing whatever benefit debt supports, politicians are able to make it seem like the result of the debt is strictly necessary to the continuation of the country. A nation that could afford free healthcare and high military spending will not quickly let go of these things even when it is no longer able to afford them. National lifestyle creep makes budgeting almost unendurably painful. While the levels of debt of many countries are massive, none of them started by going into a large amount of debt, but rather they became comfortable with a small amount of debt and kept growing. Social welfare theory And Keynesian economics are the primary culprit for the almost universal national over-utilization of debt. They allow scholars and politicians to justify what they know the people already want, which is high present spending and low taxes.…