My father's ashes will be turning in their urn, if they keep these things for nearly a quarter of a century (he died on Easter Monday in 1988 - 4/4/88, the arithmetical balance of those figures would have appealed to his interesting mind).
He always believed that if you borrowed money, or bought things on hire purchase (the "instalment plan" it used to be called in the US - not sure whether the phrase is still in vogue), you paid it back. As quickly as possible. And you stayed strictly within your (very limited in our family circumstances) means.
These days people take out debt to pay off debt that they already owe - consolidating the debt is often the phrase used. The money is still owed, it is just that the repayment terms are spread over a longer period. No fixed instalments, just keep paying even though you are bound not to get into more debt and could pay it all off eventually. Can't you?
No????
Am I surprised???? "We" have sold our economies out so most of the decent jobs where people can make a decent living have become cheap labour in China and India, and we still want to buy a Mercedes Benz on McDonalds or Burger King "wages" (wage is actually an honourable term which is more than can be said for what the McLackeys get paid!). "We" incidentally means the the western world and the people who run companies - which is actually a very small percentage of "us"!
So the debts will continue to be there and grow. Inevitably until we get back to an economic model where people (the real "we") can get get worthwhile jobs in line with their ("our") talents. And also where "we" redevelop a culture where debt is the slave not the master, and we learn to live within our means once more.
I can hear my father's ashes, which had been seriously roused, snuggling down again in comfort at that thought.
The down side is, of course, that consumer driven economic growth will slow down. And if people stop borrowing so much money, the banks will have lower profits (sob, sob, sob - don't you really feel sorrow for banks sometimes? No???? I can't say I blame you!).
"Broke" used to mean that you could not afford to buy things. These days it means you cannot afford to pay off the instalment on your accumulating debt and cannot borrow any more to pay off any more - and the bank will not help you out any further, as they cannot see that there is any more profit to be gained from your misery.
Or it means that you are an economic purist who disdains the modern thinking on this and refuses to take out debt - and cannot pay the necessary bills.
Like I have my medical insurance bill to pay next week - €218 - and my bank balance is €20 (well actually €20 and some cents), and short of another loud discussion with my otherwise loving and affectionate wife (who thinks that we should get government help to bail us out - though she does have the money herself), or one of the various customers, who owe me over €1,000 as things stand, paying earlier than the 45 days it normally takes them to pay - I cannot see how that bill is going to get paid!
Well I only had a heart attack in 2008 and it is only medical insurance ...
Well halloo there, just saw your comment on my blog. Medical bills are not fun. I only paid half of one that I received last month for a procedure I had back in November, and the bill with the balance was all covered with verbiage asking what I was going to do to clear up the delinquency. Everybody does not have $1,000 lying around, even if they are employed!
ReplyDeleteHi Dawn,
Deleteyes this is becoming an ever more significant issue wherever you live in the world and nobody seems anywhere near a realistic solution that takes account of people's ability to pay.