4 ms·

"Cars don't come with hidden costs in the form of overdraft charges, late payment fees and foreclosure and the seizure of your assets, if you pay cash for them.

by rick888 16y ago

"Cars don't come with hidden costs in the form of overdraft charges, late payment fees and foreclosure and the seizure of your assets, if you pay cash for them." You are mentioning all of them here. Can we really call these costs "hidden"? Many things in life are hidden from ignorant people. This doesn't mean we should ban them from everyone. "People should not by default be allowed to borrow this much money for simple reasons such as financial health of the nation and (in)solvency of the banks." This really just means less freedom for people. The government is then deciding what you can and can't do because you may make an irresponsible and wrong decision. When will it end? Should we ban Mcdonalds because it's making people fat? "Cheap credit has become a way to push the economy forward on money that hasn't been rightfully earned yet, that can't go on forever before it will come back to haunt us, the mortgage crisis is one nice example of what happens when the financial system is rotten. I won't be surprised if there will be another chapter to this based on the amount of credit card debt there and the number of people that find that they are no longer in a position to fulfill their obligations." I know so many people that are in Credit card debt (I was also in debt myself..and managed to cut back spending for a couple of years to pay it off). Most of them are there because they wanted to buy things they couldn't afford. The mortgage crises can also be blamed on irresponsibility. I saw a dateline special where a woman lied on her application to get a house she couldn't afford it ended up going into foreclosure. She blamed the banks. She said they shouldn't have allowed her to get the loan in the first place. It's this line of thinking that is destroying the US.

rdtsc 16y ago
> The government is then deciding what you can and can't do because you may make an irresponsible and wrong decision. When will it end? When most people will _not_ systematically fall into the same trap, get into bankruptcies or lose their homes. We are not talking isolated cases of a couple of idiots, but about 3m foreclosure listings (about 1 foreclosure listing for every 100 people in US). So a couple hundred thousand people are totally stupid and deserve what they got, but when you talk about whole percentages of the population something else is going on. Did people all of the sudden get stupid in the last 15 years? Somehow I doubt that. Nobody minds the government telling them if they can drive, what kind of additions to the their house they can build, watching over so food companies don't sprinkle lead and arsenic in the food. Why can't the government also prevent them from getting stupid loans that, if not checked, nationally (or even globally) will lead to the supposed total collapse of the economy? There is another general issue we have to deal with and that is the assumption that people are rational, autonomous agents. They will process information logically and make the best possible decision for themselves and their dependents. That sounds really good on paper or if one had to design an agent based AI world. In practice, it turns out, people are not rational. They lack critical thinking skills, they will make many decisions that will eventually hurt them, their dependents and their country. The real answer is a better education system. But that is a long term solution (and we are already failing that US terribly). In short term I think it is acceptable for the govt. to play the role of a nanny. Otherwise we end up with bigger problems overall: poverty, huge income inequality, lots of sick people, lots of homeless people and lots of angry people.
- Retric 16y ago
  Most bankruptcies are caused by medical problems. Long term unemployment causes a significant fraction of the reminder. Saying, credit is the root cause is missing the reality that most people can bay their debts until a major external issue happens. So lending based on the probability of job loss / medical issue is reasonable.
  - rdtsc 16y ago
    You are correct. Job loss and medical reasons are the top two 'official' reasons for bankruptcies. Those are the reasons that push people over the edge. However, I think a culture of over-consumption leads to the people living very close to that "edge" saving little, carrying a significant credit card balance, trying to keep up with the Joneses (or Kardashians). They live paycheck to paycheck and making minimum payments on their credit card balances. A 2-month loss of regular income will "kill" many American families. Very few have enough savings to be able to survive 6+ months without employment. BUT Now when it comes to medical bills no matter how much a middle class family saves, they will probably go under as soon as a serious chronic disease strikes. That is fucked up and is wrong. Especially scary is that many of the medical bankruptcies usually have insurance to start with. In this case here I still stick to my original point and would like the government to step in and offer a public optione. That is what Obama campaigned with and that is what has been stripped out of the health bill. As far as I am concerned, not having a public option makes the rest of the bill just a handout to the health insurance companies as all 4-5 of them they can un-controllably raise rates to compensate for little regulations and red tape that the new bill forces the to go through.

by rick888 16y ago

rdtsc 16y ago

> The government is then deciding what you can and can't do because you may make an irresponsible and wrong decision. When will it end? When most people will _not_ systematically fall into the same trap, get into bankruptcies or lose their homes. We are not talking isolated cases of a couple of idiots, but about 3m foreclosure listings (about 1 foreclosure listing for every 100 people in US). So a couple hundred thousand people are totally stupid and deserve what they got, but when you talk about whole percentages of the population something else is going on. Did people all of the sudden get stupid in the last 15 years? Somehow I doubt that. Nobody minds the government telling them if they can drive, what kind of additions to the their house they can build, watching over so food companies don't sprinkle lead and arsenic in the food. Why can't the government also prevent them from getting stupid loans that, if not checked, nationally (or even globally) will lead to the supposed total collapse of the economy? There is another general issue we have to deal with and that is the assumption that people are rational, autonomous agents. They will process information logically and make the best possible decision for themselves and their dependents. That sounds really good on paper or if one had to design an agent based AI world. In practice, it turns out, people are not rational. They lack critical thinking skills, they will make many decisions that will eventually hurt them, their dependents and their country. The real answer is a better education system. But that is a long term solution (and we are already failing that US terribly). In short term I think it is acceptable for the govt. to play the role of a nanny. Otherwise we end up with bigger problems overall: poverty, huge income inequality, lots of sick people, lots of homeless people and lots of angry people.

Retric 16y ago
Most bankruptcies are caused by medical problems. Long term unemployment causes a significant fraction of the reminder. Saying, credit is the root cause is missing the reality that most people can bay their debts until a major external issue happens. So lending based on the probability of job loss / medical issue is reasonable.
- rdtsc 16y ago
  You are correct. Job loss and medical reasons are the top two 'official' reasons for bankruptcies. Those are the reasons that push people over the edge. However, I think a culture of over-consumption leads to the people living very close to that "edge" saving little, carrying a significant credit card balance, trying to keep up with the Joneses (or Kardashians). They live paycheck to paycheck and making minimum payments on their credit card balances. A 2-month loss of regular income will "kill" many American families. Very few have enough savings to be able to survive 6+ months without employment. BUT Now when it comes to medical bills no matter how much a middle class family saves, they will probably go under as soon as a serious chronic disease strikes. That is fucked up and is wrong. Especially scary is that many of the medical bankruptcies usually have insurance to start with. In this case here I still stick to my original point and would like the government to step in and offer a public optione. That is what Obama campaigned with and that is what has been stripped out of the health bill. As far as I am concerned, not having a public option makes the rest of the bill just a handout to the health insurance companies as all 4-5 of them they can un-controllably raise rates to compensate for little regulations and red tape that the new bill forces the to go through.