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Comment by mempko | Hacker News Reader

Here is a mind bending concept. Those that hold a lot of cash are resilient. But that cash came from someone else getting into debt. That's because money IS debt. Money gets created when people take out loans. That debt ends up as income to someone else.

If you hold a lot of savings, others had to get into debt to create the money that ended up in your bank account.

If EVERYONE decides to hoard cash, then the economy goes into a deflationary spiral and everyone's ability to save goes to zero. This is called the Paradox of Thrift.

Many folks on HN have huge savings accounts. Thank those that went into debt so you can have savings. They sacrificed their resilience for you to have yours.

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Pretty much all of the value of basically every savings account is primarily debt from organisations, not personal debt.

Not trying to be pedantic, just curious.

Money isn't zero sum right? Like the U.S. Government prints it and spends it, so its not clear to me that there is a balance sheet of cash being someone elses debt. Unless its in a metaphorical sense like we're all in "debt" to the U.S government and we pay interest when they inflate more money.

The government creates money by spending, but most money is actually created by commercial banks when people take out loans. ALL money is accounted for in these ledgers. So consequently, most money in people's deposit accounts is debt, either their own or someone else's.

I recommend reading the Bank of England's Money Creation in the Modern Economy

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...

Money isn't zero sum, but its value is based on being able to exchange it for goods and services - or to compel the production of goods and the carrying out of services. The less debt exists, the less compelled people are to work.

> Like the U.S. Government prints it and spends it, so its not clear to me that there is a balance sheet of cash being someone elses debt.

The US government prints it (“quantitative easing") by creating new money and buying its own debt. In this sense it’s still correct to say this Government printed money is backed by debt.

Nb. That this is only a small proportion of the overall money supply though. Commercial bank deposits (created through bank lending) represent the vast majority.

The choice they made to give up their resilience was independent of a savers choice to save.

If I stop saving, it won’t make their life better, it will just make my life worse.

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