Finance question

Do you think the financial condition of the nation citizens would be better if the business of loaning money wasn't allowed to do anything but collect the necessary fees and damages?

Perfect example is a credit card. The fine print says, late on a payment and we may raise the interest rate on the entire balance of the card. Plus they usually charge a fee as well.

That's hardly equitable which is different than saying it is legal.

You can also assume if the citizen was not paying the excessive penalty, he would have more money to buy other goods in the economy.

No.

Unsecured lending is very risky. That is why interest rates can and do go so high. The citizen that has more money just means the stockholders of the bank have less money when she didn't pay her bill. I tired lending on Propser some time ago on a small scale, the lower rated people went bad at an alarming rate.

The financial condition of the nation's citizens would be better if it was less consumerish in general.

Quote: AZDuffman

No.

Well, at least you didn't surprise me.

Didn't I say one should be able to recover all costs? So you're saying it's all perfectly balanced and there is no excessive price gouging.

Ha.

If someone can't pay a loan at x% interest, it strikes me they won't be able to pay at 2x% interest either.

Several years ago, the civil aeronautics board suspended a national airline, TAESA, due to lack of payment for navigation services. I can see the point. but if they're not allowed to fly and thus to sell tickets, how are they supposed to pay? So to me this seemed like a matter of "we know we won't get paid, but we'll stop wasting resources on this deadbeat airline." And maybe they got something in bankruptcy proceedings.

Quote: Nareed

If someone can't pay a loan at x% interest, it strikes me they won't be able to pay at 2x% interest either.

I would argue not only do some lenders want you to miss a payment, they look forward to it because they hope to profit off it.

Again, I do not mind the fair collection of fees and damages, or known as the cost of doing business.

Quote: rxwine

I would argue not only do some lenders want you to miss a payment,

Some? Most of the lessor credit card
banks try and trip you up so you miss
a payment deadline and they can
charge huge fees. Read the thousands
of complaints from people who send
checks 10 days before a payment is
due and it doesn't get processed till
it's too late. Or payments made online
from your checking account that take
days to go thru, always just over the
line.

It's a huge fraud business that's very hard
to prove. To be safe you almost have to
make a payment as soon as you can after
the new billing cycle starts.

Quote: rxwine

I would argue not only do some lenders want you to miss a payment, they look forward to it because they hope to profit off it.

Again, I do not mind the fair collection of fees and damages, or known as the cost of doing business.

I always pay off my credit my credit card every month
Its attached to Ceasars so I earn free shows and food when I visit Vegas
I also opt out of email alert for the bill
I always want snail mail alert so I don't miss a payment

Quote: rxwine

Do you think the financial condition of the nation citizens would be better if the business of loaning money wasn't allowed to do anything but collect the necessary fees and damages?

That would be closer to Sharia banking then. Talking about limiting the usury rates is like using the "N" word. We aren't allowed to think that banking should be similar to a utility, and money a tool for the good of the people.

There would have to be a label applied, like Communism or some such. No no, we can't have the money supply engaged for the benefit of the common man, a heinous suggestion. [sarc] What we have instead is, the TBTF banks get to conjure up fresh dollars anytime someone takes out a loan, and the banks get to charge any amount of interest [usury] they can get away with. They loan trillions of dollars into the system that they don't have, it didn't exist until they loaned it into existence. Then the banks get to charge interest on money they never had, and pay huge bonuses to banking upper management.

If someone is late on say a credit card payment, the banks as you said can run the interest up to the moon. What a racket.

But on the flip side of that, large banks make very large campaign contributions. The politcos then write the banking laws, that allows banks to charge high interest on what is essentially electronic fiat money.

Joe 6 doesn't get to create all the money imaginable and loan it out at interest and determine he should be paid millions upon millions of dollars for his brilliance. Joe 6, has to make money the old fashioned way, mostly he has to trade his labor, his life, for the money to pay the interest to the banks. Joe doesn't have much influence with congress, so the rules aren't often in his favor.

In order to sway Joe and Josephines votes, congress had to make some promises and assurances to them so they would stay at work, to make the interest payments to the large campaign contributors. So politcos come up with great sounding gimmicks like "healthcare" and "social security", which theoretically will be taken out of J&J's paychecks along the way, and returned when they get old. But there is a problem with the payback.

So now, the banks can create enough money to bail out the gov., @ interest. The interest and principle again will be born by J&J, from the excess earnings from their jobs. There is a problem there as well.

Debtors prison's are making a comeback. People are being put in jail for not being able to pay back money they borrowed, from professional lenders. And, J&J have to pay for the imprisonment. http://www.truth-out.org/news/item/27306-the-shackles-return-why-debtors-prisons-are-making-an-american-comeback

What could be more fair then that? People apply for loans from professional loan service company's, who get them money to loan for next to free, to loan out to people that can't pay it back. When the payments can't be made, the debtor goes to jail, on the taxpayer dime. wtf?

If the money were real [not fiat], this amount of money could never have been loaned. The money isn't real, but the debts are, pretty close. If you control the money, you control the people. "Rothschild"

Perfect example is a credit card. The fine print says, late on a payment and we may raise the interest rate on the entire balance of the card. Plus they usually charge a fee as well.

That's hardly equitable which is different than saying it is legal.

You can also assume if the citizen was not paying the excessive penalty, he would have more money to buy other goods in the economy.

Quote: petroglyph

And, J&J have to pay for the imprisonment. http://www.truth-out.org/news/item/27306-the-shackles-return-why-debtors-prisons-are-making-an-american-comeback
]

There are no debtors prisons. Every person the
article cited went to jail for breaking a law,
like ignoring a summons, or violating parole.
None went because they had a debt. It's like
saying Clinton was impeached for sex. He
wasn't, he was impeached for committing
a crime, lying while under oath.

Quote: Evenbob

None went because they had a debt.

I don't recall where I first read it. This article from Yves Smith makes it seem like people are getting arrested for not paying private debt? http://www.nakedcapitalism.com/2010/06/jail-for-unpaid-debt-a-reality-in-six-states-strategic-default-pushback-watch.html