thebestaquaman comments on No trickle...

[–] thebestaquaman@lemmy.world 1 point 1 year ago (11 children)

Well, it solves the problem of "I'm 25 years old with a decent paying job but no saved up capital, and need to buy <house/car/etc.>". Without taking on debt, I would need to save up for years to buy this stuff, but by taking on debt I can buy it now and "save up" (i.e. pay back) over the next years.

By all means, loans should be regulated in order to prevent people from taking on debt they can't afford, and to prevent/punish predatory practices. Debt in and of itself however can be a very good thing.

I have an apartment and a car now, with down-payments that I can afford without huge problems. Without taking a loan it probably would have taken me 25 years to be able to afford this. Except I wouldn't have, because the money I'm now using for down-payments would instead have gone to paying rent.

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[–] theneverfox@pawb.social 0 points 1 year ago (10 children)

That's not a problem, that's a short cut.

In exchange for you being able to buy things before you can afford them, they're priced so it would take decades to save up.

Because if anyone sells their future, everyone has to if they want to compete

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[–] thebestaquaman@lemmy.world 1 point 1 year ago (9 children)

In exchange for you being able to buy things before you can afford them, they’re priced so it would take decades to save up.

To some degree, you're probably right. However, no matter how you look at it, building an apartment complex or even a single house, costs much more resources than what most people have saved up at any given time. So no. It's not just a matter of "competing" or that things are over-priced. Large infrastructure is just expensive to build, because it costs a bunch of man hours and materials to build it.

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[–] theneverfox@pawb.social -1 points 1 year ago (8 children)

I totally agree. But no individual should be building an apartment complex, should they? Who should build it? The city, the community, the future occupants... People should get together and put their money in a pile

This should not be an investment to extract rent and profit, it should be an investment today into the future, not through debt, but to plant trees for the future

Houses are too expensive to build as an individual? Then we're doing something wrong. Maybe we don't run electricity to every corner. Maybe we build them out of stone, so they last forever. Maybe we make them out of wood and plaster so they can last centuries. Maybe we make them out of glorified paper, so they're easy to build. Maybe we don't have central air, but use passive cooling and run an AC to certain rooms. Maybe they should be smaller and easier to build

There are other ways of doing things, better ways that will mean slower progress but stability

You shouldn't be able to leverage the future, we should always be investing into tomorrow today

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[–] thebestaquaman@lemmy.world 2 points 1 year ago (7 children)

There is literally no way you will build a decent modern house without thousands of man-hours, only in the construction itself. That's before you count the hours needed for getting the materials you need.

It's unreasonable to posit that we should design our society such that you need to save up enough money to finance something like that up-front in order to build a house. Why not go for the (current) solution, where I can loan money to finance the house, then pay that back once I have stable living conditions (because I now have a house)?

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[–] theneverfox@pawb.social 0 points 1 year ago (6 children)

Because it's inherently unstable.

The modern mortgage is only 100 years old, and it's caused crisis after crisis. They happen faster and faster too, with larger and larger bailouts to keep the system afloat

The debt system only works if you have infinite, ever accelerating, the rate of acceleration ever accelerating, growth. There's no new markets to expand into, we're running up against physics

You can't build a modern house without thousands of man hours, making a savings approach impractical? Then don't.

Build differently. It's that simple. Our ancestors figured it out for 100k years, then for a century we went crazy with it, and now it's all falling apart

You can't tell me there's no better way.

I love watching YouTube videos of 5 people building a house in a year just on weekends using Earth bags. A team of Amish people can build a house in days. I watch ones where one person builds a house. There's a guy who built a castle by himself, stone by stone

The man hours are so expensive because everyone has to pay interest on the debt, and the practice of borrowing from the future means every step of the process money is being siphoned off

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[–] thebestaquaman@lemmy.world 2 points 1 year ago* (5 children)

Build differently. It’s that simple. Our ancestors figured it out for 100k years

Yes, it is an option to revert to living in houses with earth floors, and no electricity, plumbing, or running water. My family has a cabin like that (sans the earth floor). I love staying there, and could probably build one in a year with a friend or two.

It doesn't really scale well though, so cities are out of the picture. Besides, it goes against the premise of something that works without drastically altering society. While there were large cities in earlier times (e.g. Rome around AD 0), these were largely built by slave labour. In earlier times, cities were also famous for offering terrible, cramped living conditions for common people, and disease was rife, due to inadequate waste management and clean water supply.

So yes, our ancestors "figured it out for 100k years", in the sense that they figured out how to build cramped, disease ridden cities using slave labour (alternatively near-slave workers). It's not feasible to house the modern world population on dispersed farms (the "Amish" solution), we need towns/cities.

In the end, the solutions you're pointing to would work for a far smaller global population, but not today. Even at 1700's level populations (roughly 7.5 % of the current), you would need to accept 1700's level living conditions. Whether we should drastically reduce living conditions in order to reduce the cost of housing and infrastructure is a fair debate to have, but a completely different one than the one at hand.

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[–] theneverfox@pawb.social 1 point 1 year ago (4 children)

So there's just nothing to be done then?

Come on. Just try to think of ways things could work differently

In cities you have the city build the big buildings. The one organization with both the pile of money and incentive builds new housing. Hell, the city can just hire the workers directly, why not. Give them a budget and have them go around building and maintaining the infrastructure. You don't need investors, you don't need permits, you're already the city

I'm not saying we go back to monke, I'm saying everyone needing a mortgage to buy a house is insane and not some natural consequence

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[–] thebestaquaman@lemmy.world 1 point 1 year ago (3 children)

Again, I can agree that the government being solely responsible for construction of housing could be a decent idea, but then we're no longer operating under any kind of free housing market.

You could argue that the housing market should be 100 % regulated (I'm not necessarily opposed to this idea), but that again breaks the premise of not drastically changing the society. We're talking about whether loans are a necessity (or even a positive thing) in our society as it exists now.

Further,

Come on. Just try to think of ways things could work differently.

Honestly: Why? In a decently regulated market where exploitation is largely prevented (e.g. what we have in the Nordics) seems to work pretty well. I can acquire resources now through a loan, and use those resources to be better off in the future. Private companies can take out loans to build housing and industry, and pay them back later. This benefits everyone, because we end up having decent housing, industry that otherwise could never be built, and more companies paying taxes.

I just don't see where in this picture the idea of loans becomes a "big bad wolf" that is inherently negative.

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[–] theneverfox@pawb.social 1 point 1 year ago (2 children)

You could argue that the housing market should be 100 % regulated (I'm not necessarily opposed to this idea), but that again breaks the premise of not drastically changing the society. We're talking about whether loans are a necessity (or even a positive thing) in our society as it exists now.

Oh... No, this is fundamentally impossible without drastically changing the system. All our money is just made out of debt, when people stop taking loans it's deflationary. If everyone paid off their loans today, the money goes poof

As for just keeping the Nordic model? I mean, you guys are widely held to be the best system currently...But you're still just holding the wolves at bay. You're not immune to the same forces, from my understanding you had a more communal starting place, were already developed, and have fought to stay where you are, but even despite all that there's been erosion around the edges

Beyond that, at the end of the day, a system based on debt creates exponentially growing boom-bust cycles. Fractional reserve banking is just insane, it's using a powder keg as a candle

Maybe the small loans with tight regulation juice things up and don't cause too much harm... but IDK, I just think any other option would be better. Hell just print the money and give it as grants, don't gamble and borrow from an uncertain future

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[–] thebestaquaman@lemmy.world 1 point 1 year ago (1 child)

Now it actually seems like we agree on some stuff! I largely agree with what you're saying here, and it seems much more nuanced and less extreme than "loans bad, go back to monke", which was kind of my initial impression.

I guess we just differ on the base idea of how to finance what you could rightly call "gambles" on the future (buying equipment or property to start a business, funding an education, etc.). I think that with proper regulation, which prevents both banks and individuals from taking too much risk, and prevents exploitation, loans are a sustainable and reasonable way to do this. You seem to disagree that it's possible to regulate a debt-system to the point where it becomes sustainable, and therefore think we should try very hard to change the premise that debt is required to run our economy.

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[–] theneverfox@pawb.social 1 point 1 year ago

Great!

So with your example of buying equipment... So you're now saddling your business with debt. Why wouldn't you get a second loan when you pay off the first one? You take another loan to open up another location, and once that's paid off you could open up two more.

But uh oh...One of the stores was in a bad location, but you're still on the hook for the loan. Now you're dragging the good, successful businesses down for the next 30 years

But uh oh... You're too old to manage all this anymore, so you sell it to an up and comer. But they took a loan to buy it, which the business has to pay back

But uh oh... Your success exploded, and because you took all this investment you're now required to become publicly traded. Your shareholders demand you become as big as apple or die trying, and if you refuse they boot you out and put a consultant brained CEO at the helm

That's how it works in America. You have to grow at an every increasing rate if you ever take the money, and the end result is always enshitification. And it happens fast - in my lifetime we went from zero national debt to $40 trillion, we've had 3 boom-busts, homes are up like 10x, and what happens? People are financing a single meal over several pay periods and going further into debt.

On the flip side, inequality is growing exponentially. Because basically everyone, at every stage of doing anything, has to add in the cost of interest

I just don't see any upside beyond "this is the way things are done". I also don't see a path between here and a different form of money without a total economic crash, but I think that's inevitable regardless, even the world bank is coming up with alternatives

But I think the first step is we treat debt as immoral. It's what got us in this mess, even if they exist in some form we should treat the concept as shameful

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