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Credit is a very significant part of any healthy modern economy. These in fact run on credit. It is credit tightening that hurts economies, no matter what old-time tent-revivalists may have had to say about the matter.
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Quote:
Originally Posted by Pub-911
Credit is a very significant part of any healthy modern economy. These in fact run on credit. It is credit tightening that hurts economies, no matter what old-time tent-revivalists may have had to say about the matter.
Yes, the return of a healthy economy means people are spending on major purchases such as cars, home remodeling, and travel that require them to use credit.
Yes, the return of a healthy economy means people are spending on major purchases such as cars, home remodeling, and travel that require them to use credit.
Modern economies are characterized by the rule of law, high degrees of financial transparency, and instantaneous flows of information. In such worlds, a promise to pay becomes very nearly as good as actually being paid, so nearly that the two become nearly indistinguishable. Credit thus becomes the currency and lifeblood of such economies, allowing them to achieve significant reductions in economic friction and resulting gains in efficiency and productivity. Healthy and smoothly functioning credit systems are the foundation of modern economic activity.
Yes, the return of a healthy economy means people are spending on major purchases such as cars, home remodeling, and travel that require them to use credit.
How does people buying these things on credit help the economy in ways that buying them in cash cannot? Did I do the economy a disservice by buying my car in cash? How about paying for all my vacations in full?
Less hands on the money? Less people working to earn it then
Not sure why you buy "in cash" vs putting it on credit and paying it off. Even if you pay it off that very day, you get additional protection and rewards. I buy on credit since I can let money compound in bank/stocks for a month first before letting it go to someone else
Less hands on the money? Less people working to earn it then
Not sure why you buy "in cash" vs putting it on credit and paying it off. Even if you pay it off that very day, you get additional protection and rewards. I buy on credit since I can let money compound in bank/stocks for a month first before letting it go to someone else
What are you talking about - my car or my vacations? On the former, too much hassle. Plus I don't want to rouse suspicion by carrying a $-11k (prepaid) balance on a CC! On the latter, I said "pay in full", not "in cash" - subtle distinction, but yes much of it went on a CC which I paid a few days later. Should not make much macroeconomic difference.
Last edited by ncole1; 09-15-2016 at 11:02 AM..
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