Bruenig on debt

Matt Bruenig has a post called Strike Debt calls for increasing inequality, again.
Strike Debt is some political organization, it seems. I only read a little of Bruenig's post. I had to stop when I got to this:

Needless to say, a focus on debt is pretty incoherent. The only way you make it less incoherent is to talk about income inequality and how that affects what debt means to a given class. But doing that shows you aren’t mad about debt; rather, you are mad about distributive inequality and are simply expressing that anger through the horribly clumsy proxy of debt.

Needless to say?

Let's get a definition out of the way: What is debt?

Debt is created when money is borrowed. Debt is the record of money borrowed and not yet repaid. That is what debt is. That is the definition. When most people talk about debt, as in "using debt" for some purpose, what they mean is "using credit" for that purpose. The debt is the record of the credit that was used, and not yet repaid.

If you think a focus on debt is "pretty incoherent" maybe it is because you don't know the difference between debt and credit. Or maybe it's because you have not noticed that accumulated debt, and the interest paid on it, together determine the cost of money -- a cost that competes with wages and profits, a cost that hinders production.

Matt Breunig brings up "income inequality" and "class" in his post. What he says there seems right: Some people, anyway, may be confusing debt-related problems with inequality-related problems, and the reverse. I had a thought on that. I want to take something I wrote for the 6 September post, and tweak it just a bit here:

If we spend the interest we receive, then it doesn't matter much what portion of our income is interest. But if the interest we receive stays in savings, then it matters very much. For even if interest expense and interest income both were owned and owed equally by everybody, but we tended to save regularly and never spend our savings, then we would eventually but inexorably create the sort of financial crisis that just ruins an economy for years and years and years.

If wealth and income are not equally distributed, that only speeds the process.

Debt is the measure of money that we have put into circulation, that we are paying (debt service) to keep in circulation. The problem with debt is the cost of it -- the cost it adds to using money in the macroeconomy. The reason we have so much debt is: people think it's a good thing. And policy is based on that thought.

I talk plenty about debt, and never about class. Why? Because debt, excessive debt, is a problem that affects the macro economy. Does it affect groups and classes and sectors within the economy? Maybe, but I don't have much to say about that.