[macosxnerd101]

So it's getting to be that time of year where the seniors in my class are getting uptight about college decisions. I was at lunch when a couple peers were discussing affording college, and they targeted one person who got into Georgia Tech saying that he could afford it b/c his parents bought him an expensive car, an XBox, and that they have a house in India.

I referenced Clark Howard, saying that just b/c people buy expensive things doens't mean they have money saved up. Of course, these people missed the point so I made things simpler. You have $100 in your wallet and spend $50; you now have $50 left in your wallet. Their response, verbatim: "No." And then they proceed to discuss credit cards.

And we wonder why our economy sucks and the mortgage market went to hell.

[creativecoding]

Haha. I find the people that cannot understand basic money to be funny. I have also heard a few people who think a credit card is the best thing ever because you can get free money (What?)....

[macosxnerd101]

Money is really easy: you can't spend more than you have. How do people *not* get it?

[Dogstopper]

I hate to break it to you, but not everybody is smart. There, I said it...

[Christoph]

But you CAN and these credit card companies and bankers WANT you to.

[Kilorn]

So just out of curiosity, which colleges are you thinking about applying for, macosxnerd101?

[CTphpnwb]

macosxnerd101, on 08 January 2011 - 06:27 PM, said:

Money is really easy: you can't spend more than you have. How do people *not* get it?

The same way corporations convince themselves that they can produce things with cheap (less than $100/week) labor and sell them at high prices and the economy will be fine. Example: Nike and Adidas employees who actually make the sneakers these companies sell can't afford to buy them! We're so busy blaming Government for our problems that we fail to see what very large corporations are doing to the world! How is it that people don't see that?

[dorknexus]

I love how we assume credit cards are evil and unfair and so on and so forth. There is nothing wrong with credit cards if you are responsible and you can make the payments. The true problem is that people are irresponsible and make purchases on credit which they can't afford. The problem isn't the system of credit, it's people.

This post has been edited by Dark_Nexus: 08 January 2011 - 06:03 PM

[creativecoding]

Dark_Nexus, on 08 January 2011 - 05:01 PM, said:

I love how we assume credit cards are evil and unfair and so on and so forth. There is nothing wrong with credit cards if you are responsible and you can make the payments. The true problem is that people are irresponsible and make purchases on credit which they can't afford. The problem isn't the system of credit, it's people.

It is the people, but credit cards are stupid too. It's like saying "I'll let you buy this, but you will have to pay me even more later".

Who in their right mind would do that? Save up your money then buy it...

[KYA]

Allow me to introduce you to mr. instant gratification

[dorknexus]

Quote

It is the people, but credit cards are stupid too. It's like saying "I'll let you buy this, but you will have to pay me even more later".

Who in their right mind would do that? Save up your money then buy it...

Go ask your parents if they have a mortgage, or a car loan. Or perhaps you'll require student loans? Sometimes shit is unreasonably expensive, and you need it now, but you don't have the money for it. Welcome to the real world.

As KYA said, it's instant gratification as well sometimes. However, to some people, instant gratification is worth the extra cost. They buy it now on credit and they make responsible and timely payments to pay it off. How is that stupid? To them it was worth it. The free market is subjective.

This post has been edited by Dark_Nexus: 08 January 2011 - 08:03 PM

[ishkabible]

well i won't speak for other governments but America we have the worst system for printing money.
here is how it works.

the federal reserve requests that money be printed, the government gives them a really big IOU called treasury bonds(i think there are others like notes as well) at some interest rate(witch is now 0% witch means we print money at no cost), then the money is put in to circulation.

now there are a few major things wrong with this

1) if all the money ever printed was grated via treasury bonds with some interest rate then how can the federal reserve pay back money that they can't possibly have becuase they have only printed the value of initial loan and once you add in interest the value is grater than the amount of money in circulation e.g. it can't possibly be paid back

2) there are different ways to pay it off that im not completely clear on but in means we go in dept to other countries or any one else that can pay off are dept in exchange for a dept to them

3) at 0% interest this effect is insane there is nothing holding back the value of the dollar from decreasing. the only thing that allow's the value of the dollar to stay a float is the rate at witch it is printed, the rate at witch it is destroyed and the cost to make the currency it's self.

im not expert by any means and i may have something's wrong here as i haven't studied this very much but it seems pretty fucked to me. i asked my dad about this (who majored in economics and tends to go way over my head when he talks about something) and he said "exactly, the gold stranded worked but the government got rid of it to pay for wars". i asked what the gold standard was and he said "instead of backing are dollars with bonds we back it with gold". seems to me that we fucked most everything up when we went off the gold stranded

basically we use a giant credit card called the federal reserve to print money.

This post has been edited by ishkabible: 08 January 2011 - 08:06 PM

[CTphpnwb]

It's simple: take somebody without a college education (more than 75% of the population) and pay them under $15/hour, or less than thirty thousand dollars per year when rent, food and utilities can easily exceed that amount. Next, allow rich banks to market all kinds of tricky lending schemes to them. Then, if you really want to cause problems, allow the banks to add penalty fees when these people end up late on payments as they're likely to do.

Above all, do not ask the banks to take risks with their own money! Let them make these bad loans with taxpayer money. That way you have the public taking the risk and the banks taking the profits. It's almost perfect for screwing up an economy. Just add in tax breaks for multinational oil companies and tax breaks for people who ship jobs out of the country and you've got a trifecta for economic destruction. But wait, there's more! If you act now, you can pretend that alternative energy isn't economically viable because it needs to be subsidized to compete with the subsidized oil industry!


The question isn't why the economy sucks. It's why we wouldn't expect it to get worse.

[macosxnerd101]

KYA, on 08 January 2011 - 09:47 PM, said:

Allow me to introduce you to mr. instant gratification

Does he know Mr. Right Hand?

Dark_Nexus, on 08 January 2011 - 10:56 PM, said:

Quote

It is the people, but credit cards are stupid too. It's like saying "I'll let you buy this, but you will have to pay me even more later".

Who in their right mind would do that? Save up your money then buy it...

Go ask your parents if they have a mortgage, or a car loan. Or perhaps you'll require student loans? Sometimes shit is unreasonably expensive, and you need it now, but you don't have the money for it. Welcome to the real world.

As KYA said, it's instant gratification as well sometimes. However, to some people, instant gratification is worth the extra cost. They buy it now on credit and they make responsible and timely payments to pay it off. How is that stupid? To them it was worth it. The free market is subjective.

Instant gratification is one thing, but with a car or mortgage, there should always be a down payment, imo. With houses, I believe there is a 15-20% minimum down payment to avoid paying for mortgage insurance. And again, they're not taking out more than they can pay for in the allotted period of time. With both cars, they paid them off early, I believe, by saving and budgeting.

CTphpnwb, on 08 January 2011 - 11:12 PM, said:

The question isn't why the economy sucks. It's why we wouldn't expect it to get worse.

Couldn't agree more. In fact, a double dip is in the forecast.

[dorknexus]

Quote

Instant gratification is one thing, but with a car or mortgage, there should always be a down payment, imo. With houses, I believe there is a 15-20% minimum down payment to avoid paying for mortgage insurance. And again, they're not taking out more than they can pay for in the allotted period of time. With both cars, they paid them off early, I believe, by saving and budgeting.

But you are still taking out loans on those items and you still get charged interest so you still end up paying more than you would had you just waited and saved.