this post was submitted on 07 Dec 2023
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There's no public debt crisis. People don't understand how government debt works. One casualty of this is the slow green transition which will cost us dearly in the future.
Yep. Debt is an investment to increase taxable value later to make up for it. It's also mostly owned by Americans, so the money paying for debt is going back into the economy, which is then creating more taxable value. As long as debt is used to make more money later, it isn't bad. People understand this on a personal level (taking on debt to open a business can be a good decision, for example), but they been mislead by some people that for a nation it's bad. They say this for a reason though, and it isn't because they actually think debt is bad.
I developed this intuition for myself that I think kinda works. I think of govt debt a bit like stock investment in a large corporation. People "put money" in it because they believe it delivers returns and will keep delivering returns. And as you said, this is actually much easier for the government to do than a corporation as simply the fact of releasing the money into the economy generates returns. So instead of thinking about the size of the debt, one should be thinking about the ability of the government to function well. Ironically, it seems like this is also the way the market looks at it. It keeps throwing money at it and it only knocked off its credit rating due to the threat of dysfunction around the debt ceiling.
Yeah people have painfully simple thinking about it, but the same is true for what you say about a slow green transition - yes we should go faster and put more effort in but we are actually moving impressively fast in most areas.
Debt is ok if it translates to more income later, in national terms income really means production potential and that increased ability to produce things should result in a better standard of living for the people who make up the country. This is why it's such a problem when the rich just take it all for absurd luxuries.
The current rate of green technology transition is better than it looks for a similar theoretical reason, most the real effort is currently being spent on developing technology and building infrastructural backbones like the huge grid connection cabels out to areas suitable for large scale renewable projects. Plenty of turbines and solar farms are getting built of course with new supply chains, tooling methods, and working principles being developed as we go. The price, both economic and environmental of putting in wind and solar has dropped dramatically and continues to.
There's a lot of research projects that should be getting more funding and a lot of oil, coal and gas money that should be going to building renewables but there is a lot of funding going to great projects and as we get better tooling to manufacture the parts and install them the rate of adoption is going to skyrocket.
If we invest in building the tools then we'll be making wind turbines out of sequestered carbon and putting them up quicker then you can count them. If we invest everything in increasing capacity it'll end up in a whole load of low quality things getting made in processes that do more harm to the environment than of we hadn't bothered.
Of course consumer adoption is a huge thing and we should all get solar panels end whatever else we can but we also need to acknowledge the good things being done, praise them and call for more.