I don't really see much value in someone's axiomatic understanding of all of economics premised on the belief that they are smarter than people who study economics (even if they are; probably they are!). I'd much prefer to hear from someone who is less smart, but who admits the subject is too complex for them to fully understand and who can be bothered to go out and actually attempt to measure something (rather than telling me what it must be).
I guess I'm saying I think I can learn more from an honest person than a smart one. Now I'm questioning why I am wasting my time reading hacker news again.
The problem isn't that households can't "print currency" (in a sense they can) but that their debts aren't denominated in the currency they can print. Thus, the US government is in a relatively unique position that, for example, Cyprus and Greece do not enjoy.
A theoretical observation borne out quite well by the observed market characteristics of federal debt (e.g., the federal governments cost of borrowing.)
Also, if a household's interest payments are rising faster than its income then it will not be able to invest, say, in the education of the kids. So if you count the kids as part of that household over their lifetime, annual raises will indeed be smaller because better educated folks get bigger raises.
The bigger point is that debt is often the lubricant of growth. E.g. we're FAR better off borrowing money to educate our kids than saving money and raising kids with no knowledge or skills.
Tell that to the people who are underwater on their mortgages and are therefore severely handicapped financially because it's punitively expensive for them to move to find a new job if they become unemployed.
When I was living in the US in 2009 I was laid off as a part of a company wide restructuring caused by the recession. Because I rented I was able to relocate to a new job in 6 weeks. Colleagues who were underwater on their mortgages and therefore had to find a new job within commuting distance of their house took much longer to find new jobs.
