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Comment by onlyrealcuzzo | Hacker News Reader

Poor people largely aren't in debt. It's that rich people use massive amounts of artificially cheap debt to their advantage - and people without debt and assets pay for the bill - because the Federal government keeps devaluing their earnings and savings to pay for the party.

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People without both debt and assets aren't paying anything.

Poor people are in debt. They have student loans, medical debt, housing debt, etc.; there are people who owe on houses that they've been long evicted from. Inflation reduces that debt, which is why the fed believes its only mission is to hold inflation down.

People with savings, and who own debt are the people who suffer from inflation. Or would, if there were any. Instead we just have an explosion in price of what rich people already own, like real estate.

People without both debt and assets are paying in the sense that their ability to purchase assets (such as a home) in the future is being diminished.

It's not just assets. Commodities are up 40% from 1-year ago verse the dollar.

Producer prices as well. An acquaintance of mine runs a box factory. His paper suppliers have hiked prices twice since November, and naturally he's going to be passing this (and more) on to his customers.

> People without both debt and assets aren't paying anything.

Poor people without debt still pay because their buying power continually diminishes. Their $100 saved today isn't worth as much the next year.

Poor people without assets still pay. They are forced to pay rent to those who have assets. The rent will be priced to cover the debt of the asset owner.

> People with savings, and who own debt are the people who suffer from inflation.

People with savings most typically invest it. The higher the inflation, the riskier the investments they will take to ensure their savings don't dwindle away.

Most debt is mortgage debt - and virtually all of that belongs to non-poor people.

For the last 50 years, home prices have tracked or exceeded CPI. When home prices appreciate, you get leveraged equity on your home. You are unquestionably benefiting enormously from inflation.

Sure - if you took out personal loans to go to Cancun for the weekend, you're not doing any better. But >68% of all personal debt is mortgage debt. The majority of debt is backed by assets which are inflating. The majority of people in debt (and especially companies) are benefiting enormously.

Further - even if you did have an unsecured personal loan or an auto loan or even student debt - you can refinance to artificially cheaper rates - so you are still benefiting.

> Poor people largely aren't in debt.

  citations ?

>68% of personal debt is mortgage debt. Another ~10% is auto loan debt [1]. Most home owners aren't considered poor. A (largely) disproportionate share of poor people don't own cars, don't have access to credit, and also didn't go to college.

The idea that poor people could hold a large percentage of debt is - in itself - paradoxical / ridiculous. In order to have debt, you need something to service the debt with. Otherwise, you're bankrupt.

The major caveat here is student debt - anyone can load up on student debt regardless of ability to service - and there's no way out of the debt. You can't file bankruptcy.

[1] https://www.fool.com/the-ascent/research/average-american-ho...

"and there's no way out of the debt. You can't file bankruptcy."

To me (not from us) this sounds like indentured servitude.

It's like a concept from the days when we used to burn people at the stake and executions happened on a public holiday so everyone could watch.

It basically is. If you give someone money to the point where they cant pay the debt back and you never discharge the debt then you were actually just buying the ability to enslave that person. After all, you aren't in it for the money, you're in it for the debt relationship.

This is basically what happened with Irish indentured servants, right?

Profitable companies such as MSFT, G, FB, etc likely not in debt nor need the money.

Only the distress companies (Oil, Travel, Restaurant, Airlines) need debt more than anyone else.

Sure they are. Almost everyone does, to the point it is really hard to compete if you don't make some magic debt too. They transfer money from country X to country Y, then a company owned by themselves build them a new warehouse for more money than the local branch have left and voilà, they are now in debt to themselves and don't pay taxes because of it while they get richer because they were already profitable. The richer the company the more they likely do this.

Literally every company takes on large amounts of leverage (debt) because they can likely produce more value with the $ than the interest payments on the debt. Just because you have the cash doesn't mean it makes sense to not take on debt.

Apple Inc. currently has $196 billion dollars in cash and $112 billion in debt.

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