28 sats \ 7 replies \ @nerd2ninja 1 Sep 2023 \ parent \ on: What's NOT a scam that everyone thinks is a scam? meta
You know I rally against debt all the time, but I don't think I ever said it was because I thought it was a scam. I mean specie produced from fiduciary media (fractional reserve banking) is a scam, but the reason I rally against debt in particular is because every instance where you introduce debt into a system it breaks apart on a macro level.
I see debt like bleach. Bleach is not a scam, but drinking bleach is a mistake. (Most people would say liquor instead of bleach but I'm being humorously dramatic)
I'm curious why you wouldn't claim it's a scam, if you think it's destructive and enriches those who sell it.
My view on debt is that you're basically making an intertemporal trade with yourself. When we had our first kid, it was very valuable to be able to move into a larger house, but we didn't have the resources yet, so we borrowed them from present and future me. So far, present me is happy with the exchange and I foresee future me continuing to be happy with it.
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Well you described why its not a scam right? You borrowed money and allowed yourself to get ahead and use those gains to pay the money back. Good bleach. Washes those white socks very nice.
So what's drinking bleach? Well you didn't scam anyone, but you did cause people to do things that will kill the system you're participating in. For one thing, you probably bought a single family large house in an area that is zoned for single family housing. You did this because its nice and because you can pay for it in the future. In doing so, you've made life harder for your children. With a large plot of land being used for only one family, and with it being illegal to build a structure designed for multiple families, your children will find it more difficult to find a place to live. They could of course just live with you in that large house for their whole lives, but when they have children, because your house is not a multi-family structure, it will be more more and more unbearable.
Basically, borrowing money creates a planning problem. It makes it more difficult for all economic actors to plan how to build things in a way that has a long term sustainable future and it breaks apart as a result.
I like the way the people of the Philippines figured out their lives. They don't save pesos, they save in building materials. They then build a structure that is designed to be expanded as time goes on. When they have children, they take advantage of their design to expand on their structure to create a room for them. When they have grandchildren, they might build a second floor and so on and so forth.
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Saving in a medium of exchange makes a lot more sense to me than saving in one particular commodity that you may or may not want in the future. Of course, it would be ideal if the medium of exchange were not a depreciating fiat currency.
I don't see the connection between debt and city planning. Either one can exist without the other. Whatever the "drinking bleach" part is, I missed it. Without being too specific, I live in the middle part of North America where there are very few land use restrictions and there's lots of available land for homes. Absent a space constraint, people generally don't want to live in multi-family housing and there's no good reason to impose it on anyone.
As far as being able to find a place to live in the future, I feel like you just fundamentally don't understand market allocation. Things have to be priced such that people can afford them or the seller doesn't get anything for their goods.
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Yes of course its nicer to save in a medium of exchange rather than a commodity. The people of the Philippines do that only because of the fact that the peso is depreciating.
I do of course understand market allocation, but I understand market allocation as it applies to debt as well. Surely you can afford to pay off a 10 year loan on a house....surely you can pay a 20 year loan on a house....surely you can pay a 30 year loan on a house and so on and so forth until the debt term is the entire lifespan of the person.
So the connection between debt and city planning. I understand it doesn't make sense at first economically. We have to remember that economics is a phenomena of human action. As such, this is sort of an issue with human psychology. People buy houses in single family zoning BECAUSE it is single family zoning. BECAUSE its illegal to build multi-family structures. They can afford to buy this luxury as well. So when you do run into space constraints, the suggestion to change the zoning makes the people there feel very angry. They bought that building because it was going to increase in value as the city around them grew. If you build a multi-family structure in their area, its going to reduce their home value. They don't like that, so they lobby against it.
Whereas without debt, people might be more upset about buying a property they can't expand.
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Gotcha. That's a nice point about how city planning gets entrenched. It's very much part of the general NIMBYism that's ruining many American cities. It just doesn't apply to my situation.
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It sounds like you're using bleach to wash your clothes instead of trying to drink it lol (in other words, you're using debt right. The psychology it can cause other people hasn't affected you)
I just don't trust people in general to maintain that over the long run.
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People buy all sorts of stuff they regret. I'm not sure debt is qualitatively different.
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