I need him

The same goes for credit cards debt- how did Jane get approved for a $250k loan at a decent percent? She was already living with debt. Rick bought a car he could pay cash for and own. Jane has always financed her cars. Rick lives modestly and pays cash for groceries. Jane uses her card for groceries and gas and major purchases like tech gadgets. Rick will have more money in the bank- but every time Rick has an emergency that amount will dwindle. One major expense could wipe out a year of his savings whereas Jane- she’ll put a $5,000 auto repair on a card and pay $200 a month instead of $5k upfront. So Jane can actually leverage MORE money most of the time to make purchases than Rick.

It’s a debt based economy. You only start to get into trouble if you begin to default on debt- but even that isn’t totally true. If you already have money and have built up wealth and debt, and you suddenly hit unmanaged debt- you may STILL be better off. It isn’t just big companies that get bail outs. When millions of Americans over spent and under budgeted for homes- the government stepped in to stop a housing crisis. Even now with Covid- the government is trying to keep those who have money from defaulting all at once and creating a crisis. As a group- too big to fail. And why didn’t people have savings? Not people too poor to afford meals and struggling already- people with suburban homes and 2+ cars and middle class lives- how’d those guys manage not to have savings?

Debt. They couldn’t, can’t afford the lives they have. But by using debt, they can have more than what they are capable of. They are richer because of their debt than they could be if they simply paid cash and didn’t borrow on cars and boats and televisions and smart phones and even on groceries.

And this system of debt props up things like wage stagnation. A person making $20k a year can live very well if they have good credit and manage it well. It’s all the people who didn’t have support to establish that early on and start life with enhanced buying power who tend to have the most real and severe problems because it’s just assumed you’ll have debt.

True story- a few years ago, I had to get some information from the IRS- in order to prove I was me- I needed more than a social security and some personal information. They required that I furnish them with documentation of major debt instrument- mortgage, car loan, personal loan, line of credit. The system the IRS uses to identify you assumes that you are carrying credit debt. To them- if you don’t have debt, how can you prove you exist?

Now- most people who are “clever” will see a BS system and realize that they will likely end up better off in quality of life if they simply participate to their advantage than fight it or refuse to be part of idiocy. So the common thing to do when you see that pretty much all the successful people living lives of material comfort are doing something- is to get yourself a piece. So even knowing it’s a terrible system- most people will agree to participate because of the benefit they receive.

I don't know who downvoted you on a rampage, but that's all entirely true.. debt is a commodity and debt can be looked at as an investment on both sides. Sure, from the company extending out the line of credit there is a chance that debt is never paid, but when it is it's paid with interest; for the person taking out the debt, they now have capital they can do something with they'd otherwise never have. The only thing that pisses me off is that your credit rating will actually suffer if you stay out of debt, so when you do actually need credit you can, and probably will be penalized simply because you were never in debt in the first place. That's retarded (not the slur version). And yep, that's why I'll periodically take out loans; for the sole purpose of repaying and keeping my credit up. If that's not a monetary leech idk what is.

And you can't even pay those loans off asap, you have to go through the monthly steps and it's just a gigantic waste of paper, ultimately. R E T A R D E D.

lol. I’m used to it. And yes- I think debt is important to the economy. It wouldn’t be practical to make major purchases like a home for example- if you had to save up for 30+ years BEFORE you could move in. As for interest- while there are mixed feelings on morality and such- charging some degree of interest when you make loans as a profession to largely strangers makes sense- as you say, it helps cover the risk of those who don’t pay you back and allows you to expand your business and offer more loans and larger loans- and of course, the person making loans needs to get something from the deal to incentivize them. It does raise the question- with millions of Americans routinely giving the government interest free loans in tax over payments and such- why there can’t be more forms of interest free or low interest government loans to help people achieve “basic standards of American living” and build a better country while also creating competition for private lenders.

As for being a stupid system- it’s quite smart- it’s just that it is predatory and exploitive. The way credit scores work is less about risk and responsibilities my of the borrower (there is some of that) but more about profitability of a particular “customer.” They make less money on loans that are paid back quickly- so your credit score is more a mark of how much money you tend to be worth to creditors. The system is set up to reward those they label as grade A cash cows who over their life time are most likely to offer the largest return on any investment made. Quite literally commoditization.

What was it Churchill said? Something like capitalism is stupid, but it's the least stupid. That's how I feel about it. There is potential for a better idea, you can feel the fringes of it... it's just never been realized. We're all in the same boat, the idea eludes me as well.

And yep. on the credit score part. Perfectly articulated for anyone who doesn't understand why it's set up the way it is.

Agreed and appreciated.