- Joined
- Sep 20, 2012
- Messages
- 1,426
- Reaction score
- 596
- Gender
- Male
- Political Leaning
- Slightly Conservative
Debt and borrowing provides a way to buy goods and services, without needing to have all the money up front. Very few people would even be able to own a house, if there was no such thing as a mortgage loan and mortgage debt. How many young people could save hundreds of thousands of dollars, to buy their first house, outright? But because of loans and debt, less money up front, can buy expensive and needed items, by paying forward the value over time. Good debt helps to drive the economy and improves the standard of living.
The downside is that debt is a balancing act, that requires responsible long term planning. Debt is not a good choice for the short term thinker. The Housing Crisis in 2008 was cause by short term thinking by both the banks and the loanees. The loans were too generous for the first few years and easily entrapped short term thinkers. Many loans had no down payment, and the first 3 years of the loan was cheaper than renting an apartment. When year four came around, the loan payments skyrocketed to the real street value, with too few people having planned properly. Losing homes increased inventory, and lowered resale prices for all, until repayment seemed foolish and people started to default.
Short term thinking and debt, is also a problem in Washington; huge National Debt. Politicians tend to plan in the short term, so they can use flash in the pan, to help get campaign donations and so they can get reelected. This has resulted in bad debt decisions, that are not good long term debt investments for the country.
As an example of good debt, borrowing to build a southern border wall is a cost effective way to deal with the high costs of illegal immigration. The wall will have one time cost of $10-20billion. This investment can save the estimated $50-100billion in illegal aliens costs, per year, for 10-20 years.
Currently, the Government takes a loan for $100 Billon each year to maintain illegal aliens. The return on this investment is not there. It is a money pit, for flash in the pan. The Democrats or Progressives are shots term thinkers; latest fad thinking for maximum flash in the pan. Conservative means long standing traditions; long term planning. Trump's border wall idea is a good investment for lowering immigration debt, but it threatens flash in the pan and shady lending practices.
The downside is that debt is a balancing act, that requires responsible long term planning. Debt is not a good choice for the short term thinker. The Housing Crisis in 2008 was cause by short term thinking by both the banks and the loanees. The loans were too generous for the first few years and easily entrapped short term thinkers. Many loans had no down payment, and the first 3 years of the loan was cheaper than renting an apartment. When year four came around, the loan payments skyrocketed to the real street value, with too few people having planned properly. Losing homes increased inventory, and lowered resale prices for all, until repayment seemed foolish and people started to default.
Short term thinking and debt, is also a problem in Washington; huge National Debt. Politicians tend to plan in the short term, so they can use flash in the pan, to help get campaign donations and so they can get reelected. This has resulted in bad debt decisions, that are not good long term debt investments for the country.
As an example of good debt, borrowing to build a southern border wall is a cost effective way to deal with the high costs of illegal immigration. The wall will have one time cost of $10-20billion. This investment can save the estimated $50-100billion in illegal aliens costs, per year, for 10-20 years.
Currently, the Government takes a loan for $100 Billon each year to maintain illegal aliens. The return on this investment is not there. It is a money pit, for flash in the pan. The Democrats or Progressives are shots term thinkers; latest fad thinking for maximum flash in the pan. Conservative means long standing traditions; long term planning. Trump's border wall idea is a good investment for lowering immigration debt, but it threatens flash in the pan and shady lending practices.