4 ms·

While i applaud the motivation behind cancelling the debts of Croatia's poorest citizens, the way it was done is likely to hurt them more in the long run. Forc

by reqres 12y ago

While i applaud the motivation behind cancelling the debts of Croatia's poorest citizens, the way it was done is likely to hurt them more in the long run. Forcing banks to absorb the losses of this write-off will likely make it harder for the poorest to access credit in the future. Banks are not social institutions - they're pathological profit making entities. They will have no qualms with raising interest rates or denying credit altogether to compensate for the increased risk of doing business with their poorest customers. The poorest section of the population do not borrow money for no reason. Borrowing is often required for emergencies (i.e. medical) or short term liquidity (paying bills on time). Just as importantly, it's vital for people who want to improve their economic situation by starting new businesses. My primary concern is that banks starting to shut/price them out. The least well off will end up resorting to informal lenders (i.e. loan sharks).

Yetanfou 12y ago
With a bit of luck the least well off will end up seeing the truth in the money game - they can't win, no matter what they do. This actually goes for many (maybe even most?) people, except for the small_number%. The best way to play the game is not to play it at all - avoid loans, avoid debt, avoid a dependency on money whenever possible. Use the money you make to reduce your dependence on future money by acquiring means to increase your independence. For some this will be hard - if you live in a city there is only so much you can do - while for others it is easier. Barring a revolt of some kind (war, revolution, catastrophe, take your pick) or a radical change in the concept of money, more and more wealth will be concentrated in fewer and fewer hands. Increased automation will reduce the number of ways a large part of the population will be able to make even a semblance of a living wage. If there is no system in place to take care of these people - most likely in the form of a base living wage provided by some authority - they'll revolt before they starve. And who are they? Are you one of them? If not now, maybe soon? So... like Tic-Tac-Toe, the outcome of the money game is known before the game starts. They who make the first move, win. You probably did not make the first move, so you won't. Best not to play, then? This does not mean you should avoid money at all cost, it just means you should not follow it. Don't count on making more tomorrow than you do today. Don't base your plans around the money you'll make or that which you accrued. If you have money, use it to reduce your dependency on future money. Buy land if possible. Use money to become energy-independent. Try to become less dependent on automotive transport. Don't get insurances for anything which you can do without. Learn to produce, not consume. Be creative. Entertain yourself instead of being entertained.
- ZenoArrow 12y ago
  > If you have money, use it to reduce your dependency on future money. Spot on. People talk about the rat race. Just like any race, the idea is to finish first, but that doesn't mean working your arse off until you pop your clogs, it means stopping running first, or at least that's how I see it. The financial game is rigged. Consider, a bank wants to lend money to help you start a business, because it thinks you'll be successful. The benefits to itself if you're successful are twofold, you pay back the loan with interest, and the money you've used to pay off the interest has come out of the pocket of savers, so less interest to pay out to them too. A term you'll hear in the banking world is 'liquidity', which describes how easily money flows through the system. The goal isn't to make other people rich through savings, the goal is to get everyone spending, and make sure they get their cut. If their plan backfires and people stop spending and start saving, we have a deflationary recession, governments start implementing austerity measures, and all that's really happened is people being more careful with their money. Then there's the whole game of infinite growth on a finite planet, but I imagine that's backwards enough for everyone to see. There will be another economic revolution, within this century I'd imagine, Jah knows what it'll look like but we won't keep our current system forever.
jerf 12y ago
"Forcing banks to absorb the losses of this write-off will likely make it harder for the poorest to access credit in the future. Banks are not social institutions - they're pathological profit making entities. They will have no qualms with raising interest rates or denying credit altogether to compensate for the increased risk of doing business with their poorest customers." In historical terms, this readjustment of lenders to be more afraid that debts will just be forgiven, thus raising the cost of lending, is a deliberate and desired benefit of the debt holiday. Lending to those who can not pay it back is a millenia-old scheme for enslaving (to various degrees in various cultures) those poor people. "Credit" is not a monolithic good that is either "good" or "bad"; it must be considered in context. "Credit" for an entity that can easily pay it back can be fairly good, and can grease the wheels of the economy, but "credit" to an entity that has no realistic hope of paying it back is not a virtue and not a help. It may feel good in the short term but it helps nobody in the end. Historically speaking many cultures have acquired a fear of debt, in a long-running cycle (I italicize the word because it is important, it is not an attitude that just pops out of the normal ebb and flow of culture, it is a thing that was learned), as many other commenters are observing. If the modern world starts to reconsider its love affair with debt, it will merely be the most recent turn of the wheel, and we will hardly be the first culture to discover that easy credit can be far more destructive to everybody, from the bottom to the top, than people initially understand.
jqm 12y ago
Maybe it was the banks idea? Keep the society banking rather than seeing it destabilize and Russia come in with an "answer". 31 Million isn't much.

by reqres 12y ago

Yetanfou 12y ago

With a bit of luck the least well off will end up seeing the truth in the money game - they can't win, no matter what they do. This actually goes for many (maybe even most?) people, except for the small_number%. The best way to play the game is not to play it at all - avoid loans, avoid debt, avoid a dependency on money whenever possible. Use the money you make to reduce your dependence on future money by acquiring means to increase your independence. For some this will be hard - if you live in a city there is only so much you can do - while for others it is easier. Barring a revolt of some kind (war, revolution, catastrophe, take your pick) or a radical change in the concept of money, more and more wealth will be concentrated in fewer and fewer hands. Increased automation will reduce the number of ways a large part of the population will be able to make even a semblance of a living wage. If there is no system in place to take care of these people - most likely in the form of a base living wage provided by some authority - they'll revolt before they starve. And who are they? Are you one of them? If not now, maybe soon? So... like Tic-Tac-Toe, the outcome of the money game is known before the game starts. They who make the first move, win. You probably did not make the first move, so you won't. Best not to play, then? This does not mean you should avoid money at all cost, it just means you should not follow it. Don't count on making more tomorrow than you do today. Don't base your plans around the money you'll make or that which you accrued. If you have money, use it to reduce your dependency on future money. Buy land if possible. Use money to become energy-independent. Try to become less dependent on automotive transport. Don't get insurances for anything which you can do without. Learn to produce, not consume. Be creative. Entertain yourself instead of being entertained.

ZenoArrow 12y ago
> If you have money, use it to reduce your dependency on future money. Spot on. People talk about the rat race. Just like any race, the idea is to finish first, but that doesn't mean working your arse off until you pop your clogs, it means stopping running first, or at least that's how I see it. The financial game is rigged. Consider, a bank wants to lend money to help you start a business, because it thinks you'll be successful. The benefits to itself if you're successful are twofold, you pay back the loan with interest, and the money you've used to pay off the interest has come out of the pocket of savers, so less interest to pay out to them too. A term you'll hear in the banking world is 'liquidity', which describes how easily money flows through the system. The goal isn't to make other people rich through savings, the goal is to get everyone spending, and make sure they get their cut. If their plan backfires and people stop spending and start saving, we have a deflationary recession, governments start implementing austerity measures, and all that's really happened is people being more careful with their money. Then there's the whole game of infinite growth on a finite planet, but I imagine that's backwards enough for everyone to see. There will be another economic revolution, within this century I'd imagine, Jah knows what it'll look like but we won't keep our current system forever.

jerf 12y ago

"Forcing banks to absorb the losses of this write-off will likely make it harder for the poorest to access credit in the future. Banks are not social institutions - they're pathological profit making entities. They will have no qualms with raising interest rates or denying credit altogether to compensate for the increased risk of doing business with their poorest customers." In historical terms, this readjustment of lenders to be more afraid that debts will just be forgiven, thus raising the cost of lending, is a deliberate and desired benefit of the debt holiday. Lending to those who can not pay it back is a millenia-old scheme for enslaving (to various degrees in various cultures) those poor people. "Credit" is not a monolithic good that is either "good" or "bad"; it must be considered in context. "Credit" for an entity that can easily pay it back can be fairly good, and can grease the wheels of the economy, but "credit" to an entity that has no realistic hope of paying it back is not a virtue and not a help. It may feel good in the short term but it helps nobody in the end. Historically speaking many cultures have acquired a fear of debt, in a long-running cycle (I italicize the word because it is important, it is not an attitude that just pops out of the normal ebb and flow of culture, it is a thing that was learned), as many other commenters are observing. If the modern world starts to reconsider its love affair with debt, it will merely be the most recent turn of the wheel, and we will hardly be the first culture to discover that easy credit can be far more destructive to everybody, from the bottom to the top, than people initially understand.

jqm 12y ago

Maybe it was the banks idea? Keep the society banking rather than seeing it destabilize and Russia come in with an "answer". 31 Million isn't much.