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
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.
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
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
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.
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