Society legitimately cannot function without debt. I agree giving people predatory “micro loans” for groceries is dystopian but every society that has discovered agriculture has also discovered the concept of debt because it’s a natural consequence of an economic order so tied to seasonal cycles. Interest is also not bad, and every society that has developed debt has also quickly developed interest. Societies that have religious prohibitions or taboos against interest find workarounds because it’s proven to be a critical part of how economics works. Personally I am glad that I was able to buy a house for hundreds of thousands of dollars I don’t have yet because I will be able to pay off that in time and I appreciate that the bank is willing to lend me that money for such a long time at a relatively low rate of return for them. The Soviet Union even had banks that offered loans with interest but they were run by the State. It’s kind of unavoidable.
Well, it solves the problem of “I’m 25 years old with a decent paying job but no saved up capital, and need to buy <house/car/etc.>”. Without taking on debt, I would need to save up for years to buy this stuff, but by taking on debt I can buy it now and “save up” (i.e. pay back) over the next years.
By all means, loans should be regulated in order to prevent people from taking on debt they can’t afford, and to prevent/punish predatory practices. Debt in and of itself however can be a very good thing.
I have an apartment and a car now, with down-payments that I can afford without huge problems. Without taking a loan it probably would have taken me 25 years to be able to afford this. Except I wouldn’t have, because the money I’m now using for down-payments would instead have gone to paying rent.
In exchange for you being able to buy things before you can afford them, they’re priced so it would take decades to save up.
To some degree, you’re probably right. However, no matter how you look at it, building an apartment complex or even a single house, costs much more resources than what most people have saved up at any given time. So no. It’s not just a matter of “competing” or that things are over-priced. Large infrastructure is just expensive to build, because it costs a bunch of man hours and materials to build it.
I totally agree. But no individual should be building an apartment complex, should they? Who should build it? The city, the community, the future occupants… People should get together and put their money in a pile
This should not be an investment to extract rent and profit, it should be an investment today into the future, not through debt, but to plant trees for the future
Houses are too expensive to build as an individual? Then we’re doing something wrong. Maybe we don’t run electricity to every corner. Maybe we build them out of stone, so they last forever. Maybe we make them out of wood and plaster so they can last centuries. Maybe we make them out of glorified paper, so they’re easy to build. Maybe we don’t have central air, but use passive cooling and run an AC to certain rooms. Maybe they should be smaller and easier to build
There are other ways of doing things, better ways that will mean slower progress but stability
You shouldn’t be able to leverage the future, we should always be investing into tomorrow today
There is literally no way you will build a decent modern house without thousands of man-hours, only in the construction itself. That’s before you count the hours needed for getting the materials you need.
It’s unreasonable to posit that we should design our society such that you need to save up enough money to finance something like that up-front in order to build a house. Why not go for the (current) solution, where I can loan money to finance the house, then pay that back once I have stable living conditions (because I now have a house)?
The modern mortgage is only 100 years old, and it’s caused crisis after crisis. They happen faster and faster too, with larger and larger bailouts to keep the system afloat
The debt system only works if you have infinite, ever accelerating, the rate of acceleration ever accelerating, growth. There’s no new markets to expand into, we’re running up against physics
You can’t build a modern house without thousands of man hours, making a savings approach impractical? Then don’t.
Build differently. It’s that simple. Our ancestors figured it out for 100k years, then for a century we went crazy with it, and now it’s all falling apart
You can’t tell me there’s no better way.
I love watching YouTube videos of 5 people building a house in a year just on weekends using Earth bags. A team of Amish people can build a house in days. I watch ones where one person builds a house. There’s a guy who built a castle by himself, stone by stone
The man hours are so expensive because everyone has to pay interest on the debt, and the practice of borrowing from the future means every step of the process money is being siphoned off
Me, off in the corner believing debt is immoral
Society legitimately cannot function without debt. I agree giving people predatory “micro loans” for groceries is dystopian but every society that has discovered agriculture has also discovered the concept of debt because it’s a natural consequence of an economic order so tied to seasonal cycles. Interest is also not bad, and every society that has developed debt has also quickly developed interest. Societies that have religious prohibitions or taboos against interest find workarounds because it’s proven to be a critical part of how economics works. Personally I am glad that I was able to buy a house for hundreds of thousands of dollars I don’t have yet because I will be able to pay off that in time and I appreciate that the bank is willing to lend me that money for such a long time at a relatively low rate of return for them. The Soviet Union even had banks that offered loans with interest but they were run by the State. It’s kind of unavoidable.
Are you thinking about usury? Debt in general is actually one of the moat important threads of our societal fabric
It’s not important, it’s the cornerstone of modern society. It’s a really bad cornerstone though, like great filter level bad
What problem does it solve that couldn’t be better solved in another way?
Well, it solves the problem of “I’m 25 years old with a decent paying job but no saved up capital, and need to buy <house/car/etc.>”. Without taking on debt, I would need to save up for years to buy this stuff, but by taking on debt I can buy it now and “save up” (i.e. pay back) over the next years.
By all means, loans should be regulated in order to prevent people from taking on debt they can’t afford, and to prevent/punish predatory practices. Debt in and of itself however can be a very good thing.
I have an apartment and a car now, with down-payments that I can afford without huge problems. Without taking a loan it probably would have taken me 25 years to be able to afford this. Except I wouldn’t have, because the money I’m now using for down-payments would instead have gone to paying rent.
That’s not a problem, that’s a short cut.
In exchange for you being able to buy things before you can afford them, they’re priced so it would take decades to save up.
Because if anyone sells their future, everyone has to if they want to compete
To some degree, you’re probably right. However, no matter how you look at it, building an apartment complex or even a single house, costs much more resources than what most people have saved up at any given time. So no. It’s not just a matter of “competing” or that things are over-priced. Large infrastructure is just expensive to build, because it costs a bunch of man hours and materials to build it.
I totally agree. But no individual should be building an apartment complex, should they? Who should build it? The city, the community, the future occupants… People should get together and put their money in a pile
This should not be an investment to extract rent and profit, it should be an investment today into the future, not through debt, but to plant trees for the future
Houses are too expensive to build as an individual? Then we’re doing something wrong. Maybe we don’t run electricity to every corner. Maybe we build them out of stone, so they last forever. Maybe we make them out of wood and plaster so they can last centuries. Maybe we make them out of glorified paper, so they’re easy to build. Maybe we don’t have central air, but use passive cooling and run an AC to certain rooms. Maybe they should be smaller and easier to build
There are other ways of doing things, better ways that will mean slower progress but stability
You shouldn’t be able to leverage the future, we should always be investing into tomorrow today
There is literally no way you will build a decent modern house without thousands of man-hours, only in the construction itself. That’s before you count the hours needed for getting the materials you need.
It’s unreasonable to posit that we should design our society such that you need to save up enough money to finance something like that up-front in order to build a house. Why not go for the (current) solution, where I can loan money to finance the house, then pay that back once I have stable living conditions (because I now have a house)?
Because it’s inherently unstable.
The modern mortgage is only 100 years old, and it’s caused crisis after crisis. They happen faster and faster too, with larger and larger bailouts to keep the system afloat
The debt system only works if you have infinite, ever accelerating, the rate of acceleration ever accelerating, growth. There’s no new markets to expand into, we’re running up against physics
You can’t build a modern house without thousands of man hours, making a savings approach impractical? Then don’t.
Build differently. It’s that simple. Our ancestors figured it out for 100k years, then for a century we went crazy with it, and now it’s all falling apart
You can’t tell me there’s no better way.
I love watching YouTube videos of 5 people building a house in a year just on weekends using Earth bags. A team of Amish people can build a house in days. I watch ones where one person builds a house. There’s a guy who built a castle by himself, stone by stone
The man hours are so expensive because everyone has to pay interest on the debt, and the practice of borrowing from the future means every step of the process money is being siphoned off