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If you think it's a problem that 2 billion people have negative net worth, ban lending. Good luck with that. As for Jerome Kerviel, take it up with the folks p

• danieltillett 11y ago
  Lending to the very poor is a real problem since the interest rates they pay are astronomical. A lot of poor stay poor because they can’t get out of their debt trap. It is defiantly a hard problem to know how to best compare wealth between groups, but as long as you keep the method the same then the delta does tell you something interesting. There does seem to be a massive increase in wealth concentration at the top, which I don’t think is a good thing.
  • Pyxl101 11y ago
    But loans are also a critical way to get leverage. You buy some equipment for your farm up front so that you can produce more food immediately. If you have to save up for a year to buy that equipment, then you're far behind where you are if you buy it with a loan. This is why most people buy houses with a mortgage: because they'd rather live in a house today and pay it off for 30 years, than save up for 30 years (while living where?) and buy it in cash at the end. Lending is generally a good thing. I'm not sure what to do about the cost of lending to the poor. Perhaps there should be government aid of some kind to help them find jobs or start a business. Ultimately, every person needs to make the decision for themselves about whether it's better to save and buy the things they need in cash, or take a loan to buy those things now.