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Comment by ThePadawan | Hacker News Reader

The term "debt" is really helpful. It also explains that while you can pay off debts by taking on other debts, there is a good reason why this is illegal (if done with money) in the real world.

Technical debt in your solution is fine. Running a Ponzi scheme in your solution isn't.

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> there is a good reason why this is illegal (if done with money) in the real world.

Erm, it very much isn't illegal. At least not in most places.

Taking on fresh debt to pay off other debt is the very definition of a consolidation loan which is perfectly legal in most, possibly all, jurisdictions.

There are limits of course, like not using a loan to pay the deposit on a mortgage, or simply not lending beyond defined means, but these are set by the bank to manage their own exposure to risk rather than limits set by law. Such limits are merely encouraged by law, via regulatory limits on standing capital compared to debt held and so forth.

also basically any 'balance transfer' option on pretty much every credit card ever.

In the brick and mortar world rolling debt is common.

I think debt is also useful for the interest metaphor. An unfinished kludge by itself may not be very expensive to fix up and change, but if that kludge doesn't change and becomes a dependency in a complex environment it is likely to become much more painful to fix later.

> while you can pay off debts by taking on other debts, there is a good reason why this is illegal

Loan consolidation is quite normal in the UK

Sorry, I was mentally adding "without the consent of both parties".

Because otherwise, what would stop you taking on a loan for X, then paying it off after a while by taking on the same amount from another bank?

> Because otherwise, what would stop you taking on a loan for X, then paying it off after a while by taking on the same amount from another bank?

Nothing. That's why lenders do credit checks and due diligence.

Absolutely nothing stops you. The bank you owe money to has no rights whatsoever to control where the payoff money comes from.

https://www.moneycrashers.com/responsible-use-0-balance-tran...

The bank lending the money may we'll care where it's going.

A bank's primary business is managing risk. And borrowing from Peter to pay Paul (having previously borrowed from Paul) is a significantly different risk profile than borrowing for investment or even present consumption.

In business/commercial lending the purpose of the loan is typically a part of the contract. You can’t say you will use the money to buy equipment and then use it to pay off another debt. Also you will have to provide regular (yearly/quarterly) financial statements (typically audited) that include a balance sheet that would list all outstanding debts and assets. As long as you abide by all your existing and future loan covenants you certainly can use loans to pay off debt and many people do. When you can’t it’s due to contracts, not “laws”.

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