A debt perspective

[user removed]

The current national debt in the US would build 1,583 nuclear aircraft carriers @ 12 billion each.

A child is born $53,000 in debt, about 20 times what it was in 1971.

regards
mech

[oil pan 4]

I have realized that for quite some time now debt is the new currency.
But I tend to do my own thing and say F the trend a lot.
Got this crazy idea one day in 2008 when I owed $140,000 on a $120,000 house that this game is unwinnable and to keep doing this would be insane. So we got a house we could almost buy outright.
As a result I have no credit card debt, our house is paid off, we have no car payments, no rent. Just taxes.
I enjoy something most Americans under the age of "pensioner" never experience. That is not giving a large chunk of my income to some bank.

[darcane]

Originally Posted by oil pan 4

I have realized that for quite some time now debt is the new currency.
But I tend to do my own thing and say F the trend a lot.
Got this crazy idea one day in 2008 when I owed $140,000 on a $120,000 house that this game is unwinnable and to keep doing this would be insane. So we got a house we could almost buy outright.
As a result I have no credit card debt, our house is paid off, we have no car payments, no rent. Just taxes.
I enjoy something most Americans under the age of "pensioner" never experience. That is not giving a large chunk of my income to ssmell bank.

The problem with debt is that it spends exactly the same as cash allowing people, and governments, the ability to spend beyond their means. That coupled with gradually reducing the nominal interest rates to zero over the last 30 years has encouraged overspending and deincentivized saving.

I envy where you are at and would likely be in a similar state if I weren't married. I had car payments once and hated it, paid cash for every car since. Credit card debt is usually zero. Debt on a house... well, that's another story. We're in the process of spending way more than I'd really like to get a home that will meet the needs of everyone in my family... Yikes!

[Frank Lee]

My neocon friend sent me this:

AT LEAST MARCUS TILLIUS CICERO, SEEMS TO HAVE GOT IT RIGHT. BACK EVEN IN 55 BC.
"The Budget should be balanced,
the Treasury should be refilled,
public debt should be reduced,
the arrogance of officialdom should be
tempered and controlled,
and the assistance to foreign lands should be
curtailed, lest Rome will become bankrupt.

People must again learn to work
instead of living on public assistance."
- Cicero , 55 BC



So, evidently we've learned nothing over the past 2,071 years.

I replied:

Then don't expect anything to change in the next 2,071 years.

Get used to it already.

[gone-ot]

...and ROME failed too.

[redpoint5]

This thread is right up my alley.

In the U.S., we live in an entitlement culture. Just pay attention to how many commercials use the phrase, "you deserve...".

What we deserve is to apply our creativity, strength, and discipline to something productive, living well within our means, and being generous towards true need.

No politician will be popular if they campaign on reigning in spending, because when it comes down to it, the public won't stand for reductions in anything. Our options right now are to waste money on building walls, or waste "rich people's" money on those who make poor life decisions.

[Fat Charlie]

Like any tool, debt can be good and bad. There's a huge difference between necessary debt an unnecessary debt.

Mortgage debt sure looks crushing, but I was going to have to pay for a place to live anyway. I had been renting in a nice duplex for $1100 a month (plus utilities and I had to mow/shovel, etc.) With zero down I moved into a nice house with a payment of $1250 a month.

The value of a house, like a stock, is irrelevant until the day you have to sell it. It's gone up and down in the last 13 years, but what have I been getting for that extra $150 a month? Modding. Our first day there I took a jigsaw to the basement door and put in a cat door. Now I've got an attic, a shed, a swingset, gardens, an indoor hot tub, an outdoor pool, a fire pit, an invisible fence and a paved driveway. I've installed ceiling fans and done some other wiring. I've modded the deck, planted fruit trees, transplanted maple trees, cut down various others and planted some bushes. We've done some cool painting.

Now I mow the lawn to my own standards, not worrying because I was out of town for the weekend and the landlord is coming over tomorrow for some reason and will see it shaggy. Renting, we may have been allowed to pay out of our own pockets to pave the landlord's driveway and maybe paint some rooms. After getting permission and having the colors approved. Oh, and I also get a $500 break on my property taxes for being such a great guy. Since I couldn't get that as a renter, the $150/month drops down to $109 a month. Sure, taking on $179k in "debt" sounds bad, but all we really did was increase one of our expenses a bit and radically improve our lives. And after enjoying our better living conditions for years, if we get any money at all out of a sale then we're ahead even more. Renting, we'd have nothing but a U-Haul full of stuff.

Without debt, I'd have had to pay rent my whole life. But by phrasing my housing payment as debt I changed my whole life for the better and I'm on track to owning it outright.

[freebeard]

A child is born $53,000 in debt, about 20 times what it was in 1971.

Are you sure? Is that like 1989 or whatever for climate change? What happens if you start from 1789?

I suspect that that is a share of the Corporate America National debt. I would include the opportunity cost from the front-running of seven generations' collective future.

[jamesqf]

Originally Posted by Fat Charlie

...planted fruit trees...

Yes, just had quince jam on homemade ciabatta. Try buying that in a store. Or cornelian cherry... You can probably find plum, crabapple, grape, and strawberry, but mine's better than store-bought. (Cherries, peaches, and raspberries somehow never make it to jam.) And I got the first bunch of asparagus this week.

Oh, and a couple of places nearby are on the market for well over twice what I paid.

[freebeard]

My younger brother inherited all the real estate in the family; he's got quince that has been in the family for generations. I'm happy for him, having real estate is like having one foot nailed to the floor, you can only go around in little circles.

I'm with the AmerIndians. How can you sell your own Mother?

(Kidding of course. I'd like to be able to plant and pleach Hawthorne into a living fence)

Originally Posted by oil pan 4

I have realized that for quite some time now debt is the new currency.

Financialization of debt is the new productivity. It's all we make anymore.

It's still usury. 'Neither a borrower nor a lender be...' The big source of conflict in the world today is the bankers vs the Muslims (on oil).