Quote from: tabnloz on June 16, 2016, 02:09:06 PM

Quote from: MySecondCunt on June 16, 2016, 12:45:42 PM

> sovereign and corporate and private debt levels are sane
You don't understand what debt is. It's not a bad thing you imagine it to be.
If you owe me money, for instance, I'd be much less likely to rob or kill you. Because then you'll never pay me back.

Great screen name firstly.

Too much debt is basically the reason for all forms of crisis. Debt can be beneficial when assets for which you go into debt are rising or while your servicing costs are easily met, but when the tide turns.....

Now if I owe you money you may not kill me, but, lets say this debt is comparatively high, I will also not have the ability to spend my income into the economy. The is deflationary and on a society wide scale, not so good. Unless of course the asset to which I am in debt is rising

If I am a company and I have high debt, I need to be relying on cheap access to credit or a high income stream. In this case if my income stream declines (Hello energy sector) and I cannot roll over my obligations, then I cannot pay my debts and i am bankrupt.

If I am a systemically important financial institution and I leverage up my positions and the market moves against me (2008) then without sufficient liquidity or ability to call in lines of credit, I am insolvent (Hello Lehman, Hello Bear). If I am a better placed big financial institution then I may be assisted by the government and forced to de-lever / sell off over time in order to make myself less levered with assets which, if marked to market (does not exist anymore) would also render me insolvent. I may be able to pass off all my bad debts to the government, a transfer of private sector debt to the public sector (taxpayer, ultimately).
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Now if I am a government and I have lots of debt it depends which government I am. If I can print my own currency and my dollar is a gloabl reserve, I can run up my debts very very high. But if I am a country that needs to access capital from foreign markets in order to function, a high debt level will make the price at which I can borrow higher as I am more of a risk. Further if i am a country that cannot print my own currency (Greece, Portugal, Spain, italy) then I am in a difficult situation indeed.

The most likely option to bail out a governmnt is the IMF, via the SDR

Firstly, are you an alt of JJG?
This shotgun approach, with vagaries and truisms like "too much debt," is really difficult to respond to.
Clearly, "too much debt" is too much, but how much debt is that?
Whose economy will you not be able to "spend [your] income into"?
You are also confusing bad ~~systemically important financial institution~~ bank debt with national debt.
Please weed out the truisms (because unenlightening) and, if you can't limit yourself to a bullet, at least choke down the birdshot. K?