The concept of debt

[Pekka]

Interesting concept. You can have negative money. You can get currency, so you can get things. But you owe.

I simply don't live in the same frequency level of some people, who buy stuff that aren't necessary or even nice little luxuries when they can't afford it, need it or even get a long time pleasure from it.

I undersand you go to to debt when you absolutely need your necessities. You then need your negative money.

But other than that, I don't see how people consider it lightly, as in yeah I'll pay that back some day. Uh oh?

The only time I see negative money as a good thing for a person is when I can benefit from that debt. Let's see I'm making an investment, I need the amount of money, but I'm definitely getting return if investments that makes the debt a reasonable choice.

But I don't get a debt if I need a new ride, a new TV, if I get by already and I want that new ride, then I'm just going to have to get that money. Or do what ever other options instead of straight debt and negative money. Payments every month, lease it, sure. Debt? No thanks. Unless I'm benefiting from it, that is getting return of investment, why the hell would I ever 'pay it back later' and owe?

That to me seems stupid. If you want to make money, make money. If you want to owe and have negative money, well that's even easier. I am excluding the scenario where it happens out of getting necessities, when you really need it.

[Pekka]

I mean a person sees something he wants. He thinks, I can't afford that. But I can owe, and get it anyway. They don't even know how they are going to pay it back, in fact it becomes a fantasy and they believe well, I always drop on my feet running so it'll be ok.

But they are going negative on their balance, so they are not only not having any money, they are in fact in worse situation than that and in those terms, they don't even own the thing they just bought.

[Cort Haus]

Well said.

[Pekka]

But this is really good for businesses and services. You can sell products and services to customers who should not be there in the first place.

Of course the premise is that the person can afford it, but not right at that moment. But it's usually the case when people really can't afford it and they just want it anyway.

So credit in that sense makes sense, you get your stuff moving and you get your money.

But it can be a nice thing too, when you need the kind of money you just can't accumulate in a reasonable time schedule, but you are investing it, you are making a business move. So it gives you the power to act, given that you are making a good decision, you are making good business that is. Then debt makes a lot of sense. But ONLY then and also if you really need stuff like food etc.

[Cort Haus]

I expect that some people get a hit out of spending money, regardless of the fact that they don't even have the money. Others spend money because of peer pressure to have things or do things.

[LordShiva]

Debt

Economic progress

[Pekka]

Cort Haus, yes I would agree. I think peer pressure can do a lot of things, like spending over your real limits.

Of course when making business moves, you might want to consider getting in a partner or other outside investors, so you are not in debt yourself, if it's your own business you're wanting to pick up.

I think that the concept of negative money seems so mundane to many people that it's not a big deal. If you can legally have it, it's not something you should consider as a thing to be avoided.

Should you be able to have credit, sure. Stupid people will go down the crappers no matter how you put on new restrictions and rules. They can drown on their own drool if nothing else was available.

I think it comes down to responsibility of your own actions. Lots of people accumulate phone bills they can't pay. In fact they know how much they have been spending the time, but they still think they should call some more, even though the message was not urgent. They are digging their own grave. And then they usually blame it on someone else.

So if you'd ask someone who bought something that wasn't necessary 'so you got some debt.. OK.. so how is this action you made, how is this benefiting you? You got the stuff earlier? Did you really need it?' .. it is as if people think that's what the banks and credit are for there anyway.

Who would buy a house if it wasn't for banks? Well, a house is an investment in itself. A new plasma TV is not.

[Pekka]

So one of the points is economic responsibility to yourself. We assume you have a job and it pays the bills, even if barely. So you run your credit adn you are always behind your real assets. Then you wonder why you can't accumulate any wealth?

Well, to me it seems like in most cases to get wealth, you need some money first. You need some money to make moves, and these moves will give you the action. Be it stocks, property, your own business, partnership, what ever it is, but you always need some money. Now if you run on negative money all the time, you are never going to have that money to make those moves.

Assume you will not succeed the first time you try. So you need to build up again and try again. But you need to be on the plus side, to have that little money. That little money can be used to get more money from the bank even. But always handle it as a way to get more, to accumulate more. If you don't, you won't get it.

So if you'd rather buy the new plasma and have that habit, say you still make it usually, but you do that on regular basis, you won't be gaining any wealth. But you might be contributing to my wealth

[Jon Miller]

Originally posted by Cort Haus
I expect that some people get a hit out of spending money, regardless of the fact that they don't even have the money. Others spend money because of peer pressure to have things or do things.

Other's like to have a good time, and don't let not having the money stop them.

JM

[Impaler[WrG]]

I think the Romans had a good concept of dept, if you didn't pay your dept YOU were the colateral and the lender could leagaly take what he was owed by cutting off a part of your body.

Neitzche came up with a nice aphorism "Any dept can be repayed by the pain of its agent". You see this in expression like a " the criminal has re-payed his dept to society", people literaly mean that the pain of incarceration repays the dept of the crime. As you can see the concept of dept is deeper then "money", its realy about pain and pleasure, money is a representation of pleasure and negative money must theirfore be pain.

[Jon Miller]

Err, but in the case of the criminal he owes society because of the antisociety activity he has done.

In the case of the debter.. how is it the same?

I hearby dub your post a pekka post (as in wtf pekka?).

JM

[Solly]

Liquidity constraints.

[Eli]

Other's like to have a good time, and don't let not having the money stop them.

When the time to repay the debts for that good time comes, they will definitely have money stop them from having more of it.

[Jon Miller]

But that's the future. Who knows what will happen then?

JM

[Pekka]

Impaler, that's interesting, never really thought about it that way....

"Err, but in the case of the criminal he owes society because of the antisociety activity he has done.

In the case of the debter.. how is it the same?"

Well, the way to punish people was has been evolving, we are becoming more and more sophisticated in punishing the mind instead of the body. This change started happening in the 1700s. A decisive turn was happening to punisihng the mind. Before that, pain was just enough.

Also, we started to think we might punish the mind and mold the mind into something else, something better. See 'welfare states' and also the same section 'society is at falt at all times'

But it is a clear indication that since this has changed, then it must mean that the older times you had a system where you could pay your 'debt' with getting physical punishment rather than mind games.