Is being in debt a good thing?

[wellwisher]

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.

 

[Tbird19482]

Household net worth has grown by 91% since the beginning of 2009. This has been the most successful decade for markets... ever.

can you show us where you got your info from?
91%??
I know my household net worth hasn't gone up that much and I don't know of anybody else's that has
have a nice day

 

[Vadinho]

In ancient times, interest and money lending were considered sins and taboos. The magic of compound interest explains how destructive money lending can be if abused or allowed to become the standard way of financing. Debts were either paid off or the lender was murdered once the debt burdens became extreme. Wars erased debts, wealth was destroyed and then recirculated. If everyone is in debt, everyone is then a slave to the money lenders. Money is basically a form of debt, it is created via debt instruments and traded via debt instruments. What I consider an asset likely originated by someone else's debt. This system did not emerge in a vacuum and is fairly new to human history. We shall see if a world controlled by debt can last.

 

[Kushinator]

can you show us where you got your info from?
91%??
I know my household net worth hasn't gone up that much and I don't know of anybody else's that has
have a nice day

If you clicked the 91% embedded hyperlink, it would have brought you to a page that displays this graph:

I also added an inflation adjusted figure. click here <-------- to explore

 

[presluc]

Household net worth has grown by 91% since the beginning of 2009. This has been the most successful decade for markets... ever.

Wasn't talking about what's best for Markets . Was talking about what's best for America and the American people.
American debt = not so good , American progress = well budget cuts on NASA, EDUCATION , VETERAN BENEFITS, , HEALTHCARE FOR ELDERLY AND THE POOR.

Everybody keeps talking about government wasteful spending , ok what's the government spending money on ,or should I say who??eace

 

[presluc]

Being in debt is always bad thing. Currently I have small loan ($3293,76 = 3000€), that amount was missing for some work related stuff. Having 0 student loans, living in relatively cheap apartment (828^2 ft $571/month, with sauna) - I don't have hurry with pay back loan, but it's still always in my mind, like disturbing brain-worm. Being in debt is mental problem, something to deal with (like a prison).

A good post but the old ways of dealing with loans "paying them off ASAP" I'm afraid are gone . the new pretend they will go away or be handled by the next generation.eace

 

[presluc]

In ancient times, interest and money lending were considered sins and taboos. The magic of compound interest explains how destructive money lending can be if abused or allowed to become the standard way of financing. Debts were either paid off or the lender was murdered once the debt burdens became extreme. Wars erased debts, wealth was destroyed and then recirculated. If everyone is in debt, everyone is then a slave to the money lenders. Money is basically a form of debt, it is created via debt instruments and traded via debt instruments. What I consider an asset likely originated by someone else's debt. This system did not emerge in a vacuum and is fairly new to human history. We shall see if a world controlled by debt can last.

Sooner or later I think somebody is going to start calling in the loans .eace

 

[Kushinator]

Wasn't talking about what's best for Markets . Was talking about what's best for America and the American people.
American debt = not so good , American progress = well budget cuts on NASA, EDUCATION , VETERAN BENEFITS, , HEALTHCARE FOR ELDERLY AND THE POOR.

Everybody keeps talking about government wasteful spending , ok what's the government spending money on ,or should I say who??eace

You said:

Private corporations are not doing to well in this decade.

Which is contrary to the evidence.

 

[Vadinho]

Sooner or later I think somebody is going to start calling in the loans .eace

Eventually, you always have to pay don't you?

 

[presluc]

You said:



Which is contrary to the evidence.

Contrary to the evidence???
Unless you haven't heard 740 million went for private organizations just bailout money, Research grants is still going no body knows how much "classified ya know' , Tax cuts for Millionaires and Billionaires for paying taxes, private CEOS running private corporations, then there's the subsidies given out every so often. to private corporations like oil .
Take away taxpayer money going into these private corporations then lets see how they do , after all to use quotes and old phrases used on the average American people 'PULL YOURSELF UP BY YOUR BOOTSTRINGS" or "STOP LIVING BEYOND YOUR MEANS.

The other private companies like THE Gap, JCPenney, GMC, Chrysler Sears just to name a few didn't fair so well getting government money., Oh there was a time when the government threw some cash their way but when they started losing money they and a lot of others got kicked to the curve.eace

 

[presluc]

Eventually, you always have to pay don't you?

That's the way I live anyway, but I look at the debt my country is in and say well if I had it I would help as much as I could but with our budget the way it is and medicare and health benefits inching up, I have given up a lot of charities I once contributed to.eace

 

[Kushinator]

Contrary to the evidence???
Unless you haven't heard 740 million went for private organizations just bailout money, Research grants is still going no body knows how much "classified ya know' , Tax cuts for Millionaires and Billionaires for paying taxes, private CEOS running private corporations, then there's the subsidies given out every so often. to private corporations like oil .
Take away taxpayer money going into these private corporations then lets see how they do , after all to use quotes and old phrases used on the average American people 'PULL YOURSELF UP BY YOUR BOOTSTRINGS" or "STOP LIVING BEYOND YOUR MEANS.

The other private companies like THE Gap, JCPenney, GMC, Chrysler Sears just to name a few didn't fair so well getting government money., Oh there was a time when the government threw some cash their way but when they started losing money they and a lot of others got kicked to the curve.eace

ok........

 

[presluc]

ok........

I look at the debt America is in today and in my humble opinion even after all the budget cuts , America is far from OK.eace

 

[presluc]

ok........

I look at the debt, even after all the budget cuts America is in today and in my humble opinion even after all the budget cuts , America is far from OK.eace