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I doubt that actually happens with food. Over the course of a year, the person taking payday loans has less total money to spend on food, because he's paying i
by jibiki 18y ago
I doubt that actually happens with food. Over the course of a year, the person taking payday loans has less total money to spend on food, because he's paying interest. That's much more relevant than the extra food money he might have over the course of a week.
- nostrademons 18y agoI'd kinda like to see actual data either way. It's possible that he just rolls over the payday loans into larger loans, perpetually increasing the debt overhang. From the anecdotal news stories, this seems to be quite common. I'm fairly certain this happens with credit cards: plenty of people max out one credit card to pay off another. And wasn't there another poster in this thread who suggested people were taking out payday loans to pay off late fees on bills? That's basically just letting your debt compound. The additional debt load is effectively an increase in the money supply, which we know causes inflation. So yeah, I dunno if there's a direct connection, but it seems plausible.
- jibiki 18y agoThis site looks, a bit shady, but it does give figures: http://www.blacklistednews.com/view.asp?ID=6397 http://www.blacklistednews.com/view.asp?ID=6397 > Total U.S. credit card debt reached almost $800 billion in November 2007 In contrast, the US GDP is about $14 trillion, so credit cards probably have some inflationary effect (GDP isn't the right statistic, what's needed is some measure of the total money supply, but I'm not sure how that's done.)
- nazgulnarsil 18y agoM0 or m1. gov uses m3 to make inflation look smaller i believe.
- jibiki 18y agoAh, thanks. M1 seems to be between 1 and 2 trillion, so credit card debt is definitely significant against that back drop.