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The worse alternative is sleeping on the streets when you can't pay your rent. While I do think payday loans are evil, I recognize why they exist. I would prefe

by 41209 5y ago

The worse alternative is sleeping on the streets when you can't pay your rent. While I do think payday loans are evil, I recognize why they exist. I would prefer a much more robust housing support system for lower income people. Almost all of society's problems could be fixed with more affordable housing. For example let's say you have abusive parents, if affordable housing exist the moment you turn 18 you can up and leave. But now you have bizarro programs which will stop you from attending college if you get "affordable housing"( government subsidized). When I was young I was able to find a $600 apartment, on the free market. Now the same place is 1200$. On the other hand, rent-a-centers are disgusting. I remember when I was a kid I had calculated they wanted me to pay something like $3,000 for a $500 laptop. But the idea is you only need to give them $50 a week. I went and saved my money and found the absolute cheapest laptop I could, paying cash for it. On a larger level, car loans are also extremely exploitive. No one needs a car which cost more than $20,000, but all these shiny ads show girls will swoon over you, men will respect you, as long as you buy a car which is $75,000 + tax and destination.

PaulHoule 5y ago
Depends. I got a car loan for a modest car with 0.7% APR, I don’t see a problem with that. My mother-in-law leases a new Toyota Corolla every few years; she gets trouble-free motoring at a reasonable rate. Myself I have no idea how many miles I am going to drive next year (do I work from home? take the bus? do I drive to Montreal or North Carolina a lot?) so I buy a similar car and drive it into the ground. Many of those luxury cars are leased, not loaned; the headline number ($/month) looks low compared to a loan on a modest car. You will probably need a lot of warrantee repair (a Toyota and a Cadillac are quality cars in their own estimations, but not in each other’s; if you need your car to start in the morning so you can get to work pick the Toyota.)
- 41209 5y ago
  A Corolla is only $20,000, so that fits my point. But I have seen tons of people buying cars they can't afford, in order to impress people they don't like. The easiest way to waste tons of money is by buying an overpriced car
- mnahkies 5y ago
  I've never paid more than about 3.5k USD for a car. Not sure what the second hand market is like in America but in NZ and UK you can get great cars for a fraction of the cost of buying new. In terms of maintenance, I've had some that were troublesome, and some that needed nothing, it's a bit of a lottery in that regard. Most common problems are solvable with a few hours on your back in the garage though. Possibly most interesting is that the value decay has already taken place at this point. Eg: buy a car for 2k, sell it 5 years later for 1.5k, as opposed to buying it for 80k and selling it two years later for 40k
  - mkr-hn 5y ago
    The Cash for Clunkers program destroyed the used car market in the US. It's slowly recovering as cars from the 2000s and 2010s enter it.
    - eigen 5y ago
      the CARS program ran for 1 month in 2009. so it didnt affect 2009 and later model years. it appears to have increased new car sales in 2009 so it should positively affect the used car market in later years as those new cars moved to the used car market. please explain how the used car market is "slowly recovering" 11 years later.
      - mkr-hn 5y ago
        It took almost 700,000 of the most affordable cars off the market. That plus the reliability of newer cars means they stay with their original owners longer, so there are fewer used cars on the market at prices people can afford. Used car prices are still out of reach for too many people even before factoring in things like insurance and registration.
  - PaulHoule 5y ago
    The floor price of a car that passes inspection is about what you say in the US but if you want a car for racing on a frozen lake you can pay less. The $3.5k car is going to need more than $0 a month in repairs; the lease price includes that. If you like fixing your own car, get joy out of a unique car, don’t mind owning three VWs and having one run at any time the clunker can be a win. But if your clunker needs a $200 repair every month you might decide a payment and a reliable car is better for you. Infotainment systems are in reverse gear but people underestimate the environmental and safety benefits of newer cars. There was that time I rolled my fit. I got lucky, but I didn’t even feel pain and the back window broke out so I even had an easy time getting out with the car wedged in the roadside ditch.
bradleyjg 5y ago
> I would prefer a much more robust housing support system for lower income people. Almost all of society's problems could be fixed with more affordable housing. > When I was young I was able to find a $600 apartment, on the free market. Now the same place is 1200$. The issue is that the overwhelming goal of politicians at all levels is to increase the value of individually owned residential units above the rate of general inflation. This is far and away the most popular form of welfare and impossible for any politician to oppose. It is also diametrically opposed to affordable housing so any and all affordable housing proposals are bound to be ineffective bandaid proposals. If we want affordable housing the only way to get it is first lower the homeownership rate.
- bumby 5y ago
  It’s interesting as well that the policies used (e.g., mortgage interest deductions) are almost universally considered bad policy by most economists. It’s rare to find such a consensus in economics, yet it’s such a third-rail that politicians can’t touch it
  - bradleyjg 5y ago
    It’s “worked” for a very long time. Greatest generation through even some older millennials have been able to treat their homes like a self filling piggy bank. It’s natural that there would be a lot of denial that this can’t go on forever.
    - bumby 5y ago
      I think from the economist perspective, it incentivizes the wrong behavior and ends up not helping those it was supposed to help in the first place. For example, the tax deduction incentivizes people getting the biggest house possible to maximize the deduction. It also disproportionately benefits the higher income classes because they are able to afford more expensive homes. So from a perspective of helping more people become home owners it’s bad policy. It’s actually better at helping people who already are in a class that can afford homes just be able to afford more expensive homes. From that angle, it never really “worked”. But so many people are accustomed to the benefit it’s virtually impossible to roll back.

by 41209 5y ago

PaulHoule 5y ago

Depends. I got a car loan for a modest car with 0.7% APR, I don’t see a problem with that. My mother-in-law leases a new Toyota Corolla every few years; she gets trouble-free motoring at a reasonable rate. Myself I have no idea how many miles I am going to drive next year (do I work from home? take the bus? do I drive to Montreal or North Carolina a lot?) so I buy a similar car and drive it into the ground. Many of those luxury cars are leased, not loaned; the headline number ($/month) looks low compared to a loan on a modest car. You will probably need a lot of warrantee repair (a Toyota and a Cadillac are quality cars in their own estimations, but not in each other’s; if you need your car to start in the morning so you can get to work pick the Toyota.)

41209 5y ago
A Corolla is only $20,000, so that fits my point. But I have seen tons of people buying cars they can't afford, in order to impress people they don't like. The easiest way to waste tons of money is by buying an overpriced car
mnahkies 5y ago
I've never paid more than about 3.5k USD for a car. Not sure what the second hand market is like in America but in NZ and UK you can get great cars for a fraction of the cost of buying new. In terms of maintenance, I've had some that were troublesome, and some that needed nothing, it's a bit of a lottery in that regard. Most common problems are solvable with a few hours on your back in the garage though. Possibly most interesting is that the value decay has already taken place at this point. Eg: buy a car for 2k, sell it 5 years later for 1.5k, as opposed to buying it for 80k and selling it two years later for 40k
- mkr-hn 5y ago
  The Cash for Clunkers program destroyed the used car market in the US. It's slowly recovering as cars from the 2000s and 2010s enter it.
  - eigen 5y ago
    the CARS program ran for 1 month in 2009. so it didnt affect 2009 and later model years. it appears to have increased new car sales in 2009 so it should positively affect the used car market in later years as those new cars moved to the used car market. please explain how the used car market is "slowly recovering" 11 years later.
    - mkr-hn 5y ago
      It took almost 700,000 of the most affordable cars off the market. That plus the reliability of newer cars means they stay with their original owners longer, so there are fewer used cars on the market at prices people can afford. Used car prices are still out of reach for too many people even before factoring in things like insurance and registration.
- PaulHoule 5y ago
  The floor price of a car that passes inspection is about what you say in the US but if you want a car for racing on a frozen lake you can pay less. The $3.5k car is going to need more than $0 a month in repairs; the lease price includes that. If you like fixing your own car, get joy out of a unique car, don’t mind owning three VWs and having one run at any time the clunker can be a win. But if your clunker needs a $200 repair every month you might decide a payment and a reliable car is better for you. Infotainment systems are in reverse gear but people underestimate the environmental and safety benefits of newer cars. There was that time I rolled my fit. I got lucky, but I didn’t even feel pain and the back window broke out so I even had an easy time getting out with the car wedged in the roadside ditch.

bradleyjg 5y ago

> I would prefer a much more robust housing support system for lower income people. Almost all of society's problems could be fixed with more affordable housing. > When I was young I was able to find a $600 apartment, on the free market. Now the same place is 1200$. The issue is that the overwhelming goal of politicians at all levels is to increase the value of individually owned residential units above the rate of general inflation. This is far and away the most popular form of welfare and impossible for any politician to oppose. It is also diametrically opposed to affordable housing so any and all affordable housing proposals are bound to be ineffective bandaid proposals. If we want affordable housing the only way to get it is first lower the homeownership rate.

bumby 5y ago
It’s interesting as well that the policies used (e.g., mortgage interest deductions) are almost universally considered bad policy by most economists. It’s rare to find such a consensus in economics, yet it’s such a third-rail that politicians can’t touch it
- bradleyjg 5y ago
  It’s “worked” for a very long time. Greatest generation through even some older millennials have been able to treat their homes like a self filling piggy bank. It’s natural that there would be a lot of denial that this can’t go on forever.
  - bumby 5y ago
    I think from the economist perspective, it incentivizes the wrong behavior and ends up not helping those it was supposed to help in the first place. For example, the tax deduction incentivizes people getting the biggest house possible to maximize the deduction. It also disproportionately benefits the higher income classes because they are able to afford more expensive homes. So from a perspective of helping more people become home owners it’s bad policy. It’s actually better at helping people who already are in a class that can afford homes just be able to afford more expensive homes. From that angle, it never really “worked”. But so many people are accustomed to the benefit it’s virtually impossible to roll back.