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Assets and Liabilities


Let’s make a new metric to define wealth disparity: WD

NW= Net Worth of 1% Percentile of households.

MH- Median Household Income.

WD = NW / MH

Assume NW is $1M and MH is $50K, then WD = 20

This means that the wealthy family owns an asset (an accounts receivable)  that equates to 20 years worth of of labor.

As WD goes up, this means the asset holders are gaining an advantage on society.   They now own more years of the average person’s labor.    As this increases exponentially, we essentially get something that looks a lot like slavery.

In your view, $22.5T in public debt must equate to $22.5T on the asset side.   That is spot on.    In a deflationary scenario where people are DELEVERING, by definition that means Liabilities are going down.  That means that assets are going down too.    Shrinkage means that NW is going down more rapidly than MH.   Therefore this scenario WD is going down.

Your are a big proponent of narrowing the wealth disparity gap (WD) for social reasons.  If you want to do that, it is simple.   Decrease the Assets and Liabilities in the system.  Shrink the Assets (at the Fed), shrink the Liabilities (Congress).   This would be the obvious way to narrow that wealth disparity gap.

If I was a greedy rich tycoon who wanted to see WD go higher than it is now, I would want to see NW go up with respect to MH.   I would want to see assets go WAY up while MH remains subdued.    How would we accomplish this?   We would want low inflation to stabilize MH, and we would want to expand assets/liabilities so that NW can go up.

So the argument you are making for more debt (liabilities) is basically going to by definition increase assets and therefore increase WD.    If I was the spokesperson of the Billionaire’s Club, I would want to preach this idea of the expandable balance sheet.

By supporting increased government borrowing, you are essentially supporting Wealth Disparity.

Did you realize this?   That your view on public debt will further exacerbate wealth disparity.   SO if you actually wanted more equality, you would start paying down the debt nor increasing it.


I didn’t make an argument for or against more or less debt. I simply explained that it doesn’t get paid off.

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