5 ms·

Usury and the collapse of empires

19 points by chl 15y ago

CWuestefeld 15y ago
Yet the average credit card debt per household is over $15,000 in the USA (and it grows all the time, of course). Does anyone believe that these $15,000 are invested in highly profitable ventures? Who is the author to ignore the values and priorities of the rest of the public? It seems that he wants everyone to live by his own standards. If the people borrowing this money believe that they're getting greater value than they are costing themselves, then they are in fact making themselves better off. The author doesn't see that they're better off, either because he doesn't understand their values, or he's simply not looking at them as individual people but a monolothic heap of people. But either way, he's ignoring the evidence of their own actions.
- raganwald 15y ago
  While there may be merit in the idea that consumer debt makes people happier or even is in their best interests, I’m not sure that “the evidence of their own actions” is sufficient to persuade me. Not far from where I live I can find people selling themselves to starngers for crack money. I observe people smoking cigarettes. People do things that are I believe are harmful to their own interests, and I stop short of embarcing an amorality where aiding and abetting them for my own gain is right since they have free will and make their own choices. The do believe they are better off. I think I understand their values. I do not ignore their priorities. But that doesn’t mean I always agree with them. Crack addicts and smokers, that is. I don’t have as rigid a belief about credit card debt, I’m just pointing out that “Evidence of their own actions, values, and priorities” does not persuade me in and of itself.
yaks_hairbrush 15y ago
"But can anyone convince me that credit card companies produce wealth by charging exorbitant interests to people who use the money to buy beer and chips?" How using my credit card to buy beer and chips produces wealth: 1) My rewards program immediately reduces the price by 1%. 2) If the chips are moldy and the vendor won't let me return them, I can cancel the payment. 3) I pay no interest. The credit card bill is paid in full every month.
- billybob 15y ago
  He's not talking about you, then. <quote>Economists who expect people to be rational won’t believe in usury. Surely, people borrow money to be better off. Yet the average credit card debt per household is over $15,000 in the USA (and it grows all the time, of course). Does anyone believe that these $15,000 are invested in highly profitable ventures? (They would need to be highly profitable since credit cards often charge over 15% for loans.)</quote>
  - hugh3 15y ago
    I take issue with that $15,000 number. According to: http://www.indexcreditcards.com/creditcarddebt/ http://www.indexcreditcards.com/creditcarddebt/ revolving consumer debt (of which credit card debt is a large but strict subset) was only $7400 per household in November 2010 and I doubt it's doubled since then. Indeed, http://www.federalreserve.gov/releases/g19/Current/ http://www.federalreserve.gov/releases/g19/Current/ suggests it has gone down somewhat since then. Still crazy high, of course. I can imagine how an emergency situation might cause someone to have to spend more money on a credit card than they have in their savings account. I can't imagine how the average person manages to get into that situation, though.
    - jmaygarden 15y ago
      I worked at a credit counseling service in high school (circa 1995), and numbers in that range would not surprise me at all. This is a navy town, and I couldn't count the number of young enlisted sailors that would come in with wife, kids and over $50k in unsecured credit card debt. Also, it mostly wasn't on normal credit cards. They would typically have a card for a dozen or more different retailers (e.g. Sears, Express, Limited, Target, etc.) all maxed out.
- oconnore 15y ago
  #3 is not true for the type of person he is talking about. If everyone used credit cards like you do, the credit card companies would not be in business.
chico_dusty 15y ago
Great, another gold bug.

19 points by chl 15y ago

Yet the average credit card debt per household is over $15,000 in the USA (and it grows all the time, of course). Does anyone believe that these $15,000 are invested in highly profitable ventures? Who is the author to ignore the values and priorities of the rest of the public? It seems that he wants everyone to live by his own standards. If the people borrowing this money believe that they're getting greater value than they are costing themselves, then they are in fact making themselves better off. The author doesn't see that they're better off, either because he doesn't understand their values, or he's simply not looking at them as individual people but a monolothic heap of people. But either way, he's ignoring the evidence of their own actions.

raganwald 15y ago
While there may be merit in the idea that consumer debt makes people happier or even is in their best interests, I’m not sure that “the evidence of their own actions” is sufficient to persuade me. Not far from where I live I can find people selling themselves to starngers for crack money. I observe people smoking cigarettes. People do things that are I believe are harmful to their own interests, and I stop short of embarcing an amorality where aiding and abetting them for my own gain is right since they have free will and make their own choices. The do believe they are better off. I think I understand their values. I do not ignore their priorities. But that doesn’t mean I always agree with them. Crack addicts and smokers, that is. I don’t have as rigid a belief about credit card debt, I’m just pointing out that “Evidence of their own actions, values, and priorities” does not persuade me in and of itself.

yaks_hairbrush 15y ago

"But can anyone convince me that credit card companies produce wealth by charging exorbitant interests to people who use the money to buy beer and chips?" How using my credit card to buy beer and chips produces wealth: 1) My rewards program immediately reduces the price by 1%. 2) If the chips are moldy and the vendor won't let me return them, I can cancel the payment. 3) I pay no interest. The credit card bill is paid in full every month.

billybob 15y ago
He's not talking about you, then. <quote>Economists who expect people to be rational won’t believe in usury. Surely, people borrow money to be better off. Yet the average credit card debt per household is over $15,000 in the USA (and it grows all the time, of course). Does anyone believe that these $15,000 are invested in highly profitable ventures? (They would need to be highly profitable since credit cards often charge over 15% for loans.)</quote>
- hugh3 15y ago
  I take issue with that $15,000 number. According to: http://www.indexcreditcards.com/creditcarddebt/ http://www.indexcreditcards.com/creditcarddebt/ revolving consumer debt (of which credit card debt is a large but strict subset) was only $7400 per household in November 2010 and I doubt it's doubled since then. Indeed, http://www.federalreserve.gov/releases/g19/Current/ http://www.federalreserve.gov/releases/g19/Current/ suggests it has gone down somewhat since then. Still crazy high, of course. I can imagine how an emergency situation might cause someone to have to spend more money on a credit card than they have in their savings account. I can't imagine how the average person manages to get into that situation, though.
  - jmaygarden 15y ago
    I worked at a credit counseling service in high school (circa 1995), and numbers in that range would not surprise me at all. This is a navy town, and I couldn't count the number of young enlisted sailors that would come in with wife, kids and over $50k in unsecured credit card debt. Also, it mostly wasn't on normal credit cards. They would typically have a card for a dozen or more different retailers (e.g. Sears, Express, Limited, Target, etc.) all maxed out.
oconnore 15y ago
#3 is not true for the type of person he is talking about. If everyone used credit cards like you do, the credit card companies would not be in business.

chico_dusty 15y ago

Great, another gold bug.