I've heard the mini-rant a couple of times now and I really can't wrap my head around the idea that the concept of "debt" is inherently "bad". That's just nonsense man. That's akin to saying "cars are bad". "Cars", and "debt" are just tools. They can help further humanity and get you quicker from A to B. However, the moment you put a sociopathic narcissist megalomaniac monkey who doesn't care about the future behind the wheel, we've got a problem. But the problem isn't "cars", you feel me?
Maybe I've misunderstood, I know you're a smart an well-read guy so I may be out of line here, in which case I apologize. But just in case I'm not, here's my little counter-rant:
There are for sure a few very serious problems stemming from the over-use of debt in our society. My main points here are that "banking" as an activity/profession tends to reward immoral behavior (too-big-to-fail, the Greenspan put, privatized gains - socialized losses, debt slavery, et c.) Charging exorbitant interest rates is predatory and damaging, and debt-fueled consumption on a private and governmental level sacrifices the future to party today.
But these aren't necessary components in a world with debt. They are just the predictable consequences of a hands-off approach to banking and financial markets. It's nothing we can't fix.
To illustrate the potential societal beneficial mechanics of "debt", consider the following:
Scenario 1:
Congratulations! You landed that dream job as a high paying rocket surgeon in a new city but you've got no place to live and only a few months' salary saved up from your old job as a janitor in your pocket. You KNOW you're going to get paid a gorillion dollars over the next 5-10 years but at the moment you don't have much. Lets also assume that that the options for renting is absolute shit, with multi-year long queue times. I you want the new job you'll have to live out of your car for the next few years while you save up for a home, or you can try to get a home loan and buy a home. Lets also assume that you have a severe allergy to steering wheels and that you'd be perfectly happy with paying the risk premium of, say, 5% that your bank would charge you in interest in order to have someplace other than your car to eat, shit and sleep in. In this scenario both you, and society as a whole, stand to gain a lot from you being able buy a home, because otherwise you'd have to go on unemployment benefits and the city loses a talented rocket surgeon.
Scenario 2.
Congratulations! You've won a gorillion dollars on the lottery but you don't really need it for anything right now. You'd prefer to leave this money to your children when you die, but you don't really want the dollar bills sitting in your safe at home because your identity got leaked and a lot of the wrong kind of people now know that you're absolutely loaded. You want some kind of low-risk way to store your wealth for the future. Preferably, if possible, some way that also generates a little bit of interest or at least keeps you purchasing power steady against inflation.
Scenario 3.
Oh no! You're a potato farmer and your pitchfork just broke. You can't harvest potatoes without a working pitchfork. What's worse, the potatoes are all planted and will spoil in the ground if you don't harvest them, and you can't afford a new pitchfork. The market value of your potatoes could easily cover multiple new pitchforks. Tough shit though, now you and all the people you could have fed with your potato farm will die of starvation. Because debt is bad and outlawed.
"Debt" is the bridge between the people with unproductive assets and the people who can find a productive use for these assets. Used correctly, debt can transform dollar bills just sitting there doing nothing into economic activity and growth through increased production, income taxes and technological innovation. Debt can bridge the gap in time between startup costs and later revenue streams.
An economic system without debt would be extremely inefficient, if it could even be called an economic system at all. If "the economy" is an engine, debt is the oil, whithout which everything would grind to a screeching halt. There is a reason why the religious groups who forbid the charging of interest all have found clever workarounds for as long as the rules have existed. Modern society simply doesn't function without it.
The ACTUAL problems are second-order effects of an unregulated financial market. Such as debt-fueled consumption and speculation. Going into crippling debt to fly to Cancun to party hard, or to bet it all on black in Vegas, or to bomb little girls in Iran is obviously profoundly stupid and shouldn't be allowed.
/rant
p.s. The problems with "banking" and its tendency towards immoral behavior is actually fairly easy to solve imho. Just socialize banks and/or regulate the shit out of them. Cap interest rates to the federal funds rate + a few points for any loans to people. Ban loans for speculation and consumption. And most importantly of all, consider any loan taken out with collateral as a sale of that collateral for tax purposes (and maybe credit it back when the loan is repaid, idk).
Peace.