Summary of the summary of the summary.

Post #35,394 by static 4/14/02 7:48:29 PM Reply	Summary of the summary of the summary. "Credit is ba-a-ad, mm'kay?" :-) Wade. "All around me are nothing but fakes Come with me on the biggest fake of all!"
Post #35,422 by ben_tilly 4/15/02 7:09:20 AM Reply	But that isn't true Credit is a necessary part of capitalism. It is how we pay for things now that we know will make money in the future. (Eg Getting an education, moving from renting to owning a home, getting a car when that transportation is needed to hold down a job.) The ability to translate into the present that which you have good reason to believe that you can earn allows people to take advantage of opportunities that result in us all being better off. The problem is that excessive credit is a Bad Thing. A loan at the right time is a great enabler. When it enables economically productive activity, this is Good. It is also good when it allows us to weather minor crises that we didn't have resources set aside for. But when we have a lifestyle based on credit, there is an enormous hidden cost. When we have an economic system where credit is overextended, there is risk to our monetary system. Cheers, Ben "... I couldn't see how anyone could be educated by this self-propagating system in which people pass exams, teach others to pass exams, but nobody knows anything." --Richard Feynman
Post #35,443 by boxley 4/15/02 11:44:59 AM Reply	Something else that effects the economy is cash there is a huge amount of goods trading in cash and convertables. I think this portion of the unmeasured economy has been propping up the measured one. Look at the downtown sky in Miami, no industry to speak of, a shipping and transport hub to the south and tourists, yet the building boom hasnt stopped yet. Loans made by offshore banks that are washing money and shell games to cover losses. thanx, bill TAM ARIS QUAM ARMIPOTENS
Post #35,567 by static 4/16/02 7:16:16 AM Reply	Okay, yes, you're right. It is dangerous to simplify too far, which is what I obviously did. I'm sorry. The discussion is indeed about excessive credit and unfettered credit and misuse of credit, all of which can and do cause problems in an economy. You'll have to forgive me for overreacting somewhat; although I have a credit card, I have never found it difficult to spend less than I earn. Wade. "All around me are nothing but fakes Come with me on the biggest fake of all!"

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