Is debt a four-letter word? OK, yes, it is in a literal sense. But do you consider debt a bad word, a bad thing? Richard Vague thinks that some of us may have a misguided view of debt. In his opinion, it is the type of debt that matters most.
“Most folks, when they think about debt, think about government debt. And really, that's the lesser part of the equation,” Vague told American Farmland Owner from his home in Philadelphia, Pennsylvania.
The federal government has plenty of debt, to be sure. You can watch the federal debt climb toward $36 trillion in real time (estimated) here on the U.S. Debt Clock.
Studying debt may not be on the to-do list for a lot of people. But it is of particular interest to Vague.
“A little of this, and a little of that,” when he described his professional career that has led him to his current thinking about debt.
Richard Vague bio:
“The Weekly Comment with Richard Vague” – Host
Author, Keynote Speaker
Gabriel Investments – Managing Director
Commonwealth of Pennsylvania – Secretary of Banking and Securities
Energy Plus – Chairman, CEO
Juniper Financial -- Chairman, CEO
First USA – President, CEO
His career started in banking, and later led him to venture capital pursuits. He also served as the Pennsylvania Security of Banking and Securities and briefly considered a run for president of the United States.
It is because of that diverse path that he sees finances the way that he does. “The much bigger part of the equation that almost never gets talked about is private sector debt and trends in private sector debt,” Vague said.
“And I think those are determinative in terms of our economy…if you really want to understand what's going to happen in the economy and what has happened in the economy.”
WATCH: Richard Vague hosts a series on YouTube called “The Weekly Comment with Richard Vague.” He posted a video about what he thinks about conversations people are having about the housing industry. Vague contends that higher home prices and escalated interest rates have attracted much of the attention. But he feels like people need to pay more attention to housing supply. See that video here.
Vague also has noticed how large technology companies are interested in nuclear energy. He said that this is driven by increased demand for electricity from data centers, electric vehicles, artificial intelligence, and more. See that video here.
Vague thinks that the current federal debt can help provide a comparison for private sector debt. “Let me just throw one little number out there for you that might put that 35 trillion in perspective for you,” he said.
Books by Richard Vague:
“The Paradox of Debt: A New Path to Prosperity Without Crisis”
“The Illustrated Business History of the United States”
“The Case for a Debt Jubilee”
“A Brief History of Doom: Two Hundred Years of Financial Crises”
“The Next Economic Disaster: Why It’s Coming and How to Avoid It”
And then Vague asked this, “What do you think the net worth of households is?”
He then responded, “160 trillion dollars.”
“You know a big part of the wealth…the U.S. Treasury securities that they hold,” Vague explained.
“When the government spends money, it doesn't disappear. They don’t take it out and burn it. It goes in someone’s bank account.”
That is his perspective about why he isn’t as concerned about the growing federal debt as much as some critics are.
It can’t skyrocket forever. But Vague believes that the more pressing matters are the growing income inequality in the United States with the top 10% of the population holding most of the country’s wealth, as well as the challenge of the trade deficit.
“That’s an issue that’s kind of been swept under the rug,” he said.
Note: Richard Vague will be a keynote speaker at the 18th Annual Land Investment Expo in Des Moines, Iowa, on January 14th, 2025.
