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bobcox -- I think there is significant evidence that the reverse is true for companies buying production equipment or labor.
A company can avoid paying taxes by buying production equpment or labor. Both types of investment are deducted from the profit before paying taxes. This so-called loophole is why I like loopholes (at least, some of them). This kind of loophole motivates companies to invest in their own infrastructure.
The interest that one pays on an bond issue to raise capital expenses of increased productive equipment, is made up of at least two factors. One factor is the administrative costs of administering the bond issue. A second one is the desired profit the lender want to make on the "rental" of the capital loan represented by the bond and a threat one is the risk that the debtor will not repay the bond principal. Rating agencies try to evaluate the ability of the borrower to repay the loan. therefore thee are several ratings used in the financial industry in judging the ability of the borrower to repay and not default. All three factors reduce the ability of thee borrower to obtain the desired production increasing investment.
A tax on the profit of a company also reduces the ability of the corporation to buy production equipment or hire production labor. However, if the tax is used to create the necessary infrastructures necessary to get the product to the customer and reasonable cost, then the tax is beneficial to the company.
A credit card interest not only has the risk factor, the administration factor but also the profit motive driving the interests charged. All three of these factors reduce the benefit to the laborer who used credit to purchase necessaries of life, food, clothing, housing, heat, medical care, transportation and education for his children. A tax on these necessities also reduces the ability of the laborer to provide for his family and produce the wealth desired by his employer.
Incomes greater than that required for the necessities of life are available for investment, savings, leisure or luxury items and should be used to pay for the infrastructure and governmental requirements necessary for Justice, tranquility and Security. High interests of credit card debt, educations debt and the necessities of life are all counterproductive.
Considering the Yellowstone Caldera, it is also possible that the center of the earch is heating up, making the magma more fluid with higher temperatures and coming to the surface as various volcanos. The Yellowstone Caldera is one of the largest on the surface of the world. Asphalt roads on the surface is now melting due to higher temperatukres from this soiurce. If it blows, most life on this planet will ber gone.
Champagne, Illinois has had two months of cooler than normal weather. July had two days that set new records for low temperatures.
Our rain fall is quite a bit above "normal". Remember, normal is a running average of 33 years. Our temperature and rainfall has only been measured reasonably accurately since Pres. Grant set up the National Weather Service.
Some weather researchers have investigated the conditions of the interface between the interglacial periods and the glacial periods. It is reasonably possible that we are in one of these transition periods.
My son can't drink his water due to Fracking. It even melts the Reverse Osmosis filter on the water purifier we gave him. How much is a good aquifer worth, and how do you clean up an OOPS!
Debt the First 5000 Years, by David Graeber, is a good read on this topic.
Thom is absolutely right, we need a debt jubilee.
Palindromedary ~ (Apropos to post #20) Here is that lecture I was talking about. "Capitalism Hits The Fan" by Richard Wolff. He is an economists, author, and Professor emeritus of the University of Massachusetts, Amherst. I suggest you watch this lecture--if you haven't already--and then discuss the "Moral Hazard" of a national debt jubilee.
https://www.youtube.com/watch?v=TZU3wfjtIJY
I would like to point out there is an advantage to having a low credit rating - your identity isn't woth stealing. (Except for other than financial reasons).
Why, thank you! Much appreciated, Marc, Chuck...
( S I G H ) This is getting too depressing. Maybe I'll indulge in something mind-altering and zone out awhile.... sorry Chuck... Beamin' up, now! Wheee! - AIW
Dr Kim meet Dr. Price.
It would appear from Dr. Kim's statement "...everyone should have their wisdom teeth removed..." that he is unfamiliar with the work of Weston A. Price, DDS. Dr. Price began his career in the late1890's and retired in 1930. Over this time period he observed a marked change in the dental facial structure of the succeeding generations of patients, with the older generations having broad dental arches with plenty of room for the third molars (wisdom teeth), and the younger generations having narrower dental arches with crowded and crooked third molars becoming more common.
Dr. Price suspected this was due to the introduction of "modern" foods into the diet. Upon his retirement, Dr. and Mrs. Price began a series of trips to isolated regions of the world where he discovered groups of people who were still eating their traditional foods and had excellent dental health as witnessed by their broad dental arches, well formed teeth including third molars, and well formed physiques. In those groups of similar peoples where modern foods had recently been introduced, he found tooth decay and disease amongst the older generation, with narrow dental arches, crooked molars, rampant dental carries, and changed physiques amongst the younger generation.
Dr. Price's "Nutrition and Physical Degeneration" where he describes his research, is still in print and is available at most book sellers, or through the Price-Pottenger Nutrition Foundation.
Aliceinwonderland ~ Very, very well said! Take a bow!
Pal -- You and everyone else so far seems to ignore the other moral hazard that would be eliminated. As a matter of fact it would be a much larger one. Let the creditors absorb all the losses. They would probably never provide credit again to poor credit risks.
Gary B -- I think you should also mention that most interest charges are usury in 48 of the 50 states. As you should know, that is why credit card companies are located in Delaware and one of the Dakotas.
AIW -- BRAVO! -c8
Pal, AIW -- I mostly agree with your dissing of the dems, but the solutions you provide (i.e. soft or violent revolutions, 3rd party creation) have been tried when conditions were much worse than now. They have always failed. It seems the greatest success was when an overwhelming number of dems were elected to both houses i.e. FDR.
Based on what the dems did during the 13 weeks they were in control during the last 5 years makes me think a surplus of dems in both houses would be the most likely manner in which to save the world.
Palin, I’ve heard that argument before, about people’s unhealthy habits. Such an argument overlooks various factors playing a huge role in people’s health destinies. What about poverty? There are low-income people living in “food deserts” where healthy food is simply unavailable. These folks are too poor to travel the distances to where decent unprocessed food is sold. What’s more, the cost of simple vegetables and fruits that, in the decades of our youth, were very affordable, can be prohibitive to someone on a fixed income, or struggling to make ends meet on minimum wage in today’s economy… especially if that person is a single mom with kids to feed. The brussel sprouts that in the 1980s, cost sixty nine cents a pound, now often go for $3.50 a pound or more. Bell peppers are a buck fifty or more apiece; even the cheaper green ones now cost a buck in most stores. These are just two examples; I could go on and on. Meanwhile incomes have not gone up proportionally to food prices, along with other necessities.
What you also overlook is is the sheer insanity of healthcare’s price tag, not to mention its unholy inclusion in the marketplace where commodity resides. Healthcare is not a commodity. It does not belong in the marketplace, where commodities and various optional services are sold for profit. This hijacking of our healthcare system by a for-profit extortion “industry” is the ONLY reason we’ve had this lethal price tag on healthcare and why it’s still rising, and why so many people have needlessly lost their lives over the past thirty or forty years just for lack of it. Preventive medicine that is affordable and universally accessible would make a huge difference in public health, overall. What's more, the status quo gives health providers a disincentive to help people stay healthy, creating an environment where there’s greater profit to be made by managing a disease than by simply curiing it, or preventing it in the first place.
There’s much about our whole way of life making it extremely difficult for many to take proper care of themselves. We’ve got a class of people in our society who must work such long hours for so little compensation that not only do they lack the means to provide themselves and their children a nutritious, healthy diet; they don’t have the time or wherewithal to cook anything much, beyond heating a can of soup or shoving a ready-made pizza in the oven! Processed foods are not only cheaper, they’re way more convenient for the overworked and underpaid.
Those subsisting on these cheap processed junk foods consume lots of sugar and chemicals that are very toxic to health, including high fructose corn syrup, the latter of which has made a significant contribution to the obesity & diabetes epidemic in this country.
A lack of education about proper diet is as big an obstacle as lack of means and availability for nutritious, real food, compounding the problem that much more. The processed food industry’s influence on what “information” is out there is based on misinformation that only serves their bottom line and is injurious to our health.
I think simply blaming people for their bad habits is counter-productive, Palin. It doesn’t resolve anything or fix anything. Shaming & blaming is not the solution. We need to offer alternatives that are within reach of everyone including the working poor.
My friend, let me remind you, we grew up in an era when the working class, not just the middle class, could afford to support families, own their homes and sock something away for retirement… without a college education! College was affordable or even free, as well as optional back then. Nobody was bankrupted by medical bills. The reason that’s no longer the case has everything to do with politics. When rich folks get more than their fair share of influence over laws and policies affecting everyone’s quality of life, we all are screwed except for the very, very rich. And when you have people working longer and harder for less and less, their health suffers alongside their bank accounts.
Mac’n cheese, it’s what’s for dinner! (To parody that old beef ad… tsk)
You’ve stated you still believe the majority choose to live beyond their means. Here we have an environment where the most basic necessities are held hostage by extortionists and plutofascists! In light of all that, I think your assessment is simply outrageous. Are you saying most of the debt incurred by the nonwealthy in this country is for things like vacations and new cars? Really?! Just so happens that student debt alone trumps all other debt combined. As for the rest, more than half of that is from fucking medical bills. Never mind the cost of housing and other necessities!
“Judge not lest ye be judged”- that’s one biblical quote I can get behind.
Making food safe, nutritious and accessible would require some restructuring of our society and economy. Instead of oranges from New Zealand, we could be eating fruit from our own back yards, or from a little neighborhood orchard/garden! Instead of factory “farms” we can have real, local farms again! But not while the world's food supply remains in corporate hands.
All these things, along with universal nonprofit healthcare, could make it easier for people to stay healthy, thus requiring less medical intervention. This translates to lower medical costs.
Tragically, it’s not a big enough priority in this society. Profit trumps human need. And that’s the sad truth of the matter. - Aliceinwonderland
Thom Hartmann argues for taxpayers to bail themselves out of debt they created, arguing that taxpayers bailed out the "banksters" and propped up the too-big-fail banks.
At the Center for Economic and Social Justice (www.cesj.org), we advocate using self-liquidating capital credit to build financial security for EVERY child, woman, and man and significantly reduce our dependency on consumer credit to satisfy our consumption needs and wants.
What is Credit?
Credit. A loan of money to be repaid, usually with an added amount of interest, transaction fees, or, under Islamic banking, through a risk-sharing, profit-sharing loan.
Credit, Capital. Funds lent or borrowed to finance feasible, “self-liquidating” projects that are expected to generate an income and repay the loan out of that future income. Capital credit is designed to advance outside funds to be repaid with future savings. It is a modern social tool for enabling people without sufficient past savings to become capital owners voluntarily on market principles. Also referred to as “Productive Credit” and “Procreative Credit.”
Credit, Consumer. Funds lent or borrowed to expend on consumer goods and services; that is, things that do not pay for themselves. Credit, Interest-Free. Loans made for productive purposes, where the money loaned does not involve existing savings, and therefore no interest is due to the lender.
Under certain religious and philosophical traditions (particularly in Judaism, Christianity and Islam), interest charged for non-productive loans is considered usury, as it takes a profit where no profit is generated. In a productive loan involving existing accumulations of savings, the provider of those savings (the lender) is due a return because the loan is recognized as a form of investment and due to the owner as a right of private property.
When a productive loan is made based on the present value of existing or future marketable goods and services whose proceeds are used to pay off that loan (and not based on past savings), the lender has no pre-existing private property interest and therefore no interest is due. (See also “Credit, Pure”)
Credit, Non-Recourse. Loans in which the borrower is insulated from the risk of default and his personal assets cannot be seized in the event of loan default. Instead the loan will generally be secured by the assets standing behind the loan, by loan default insurance, or by a guarantee of a third party or the corporation itself. Under one example of nonrecourse credit, a loan to a corporation is nonrecourse to the shareholders of that corporation, unless the shareholders personally guarantee the loan. Another example is with a leveraged Employee Stock Ownership Plan, where the workers who benefit from loans made to an ESOP Trust are not personally liable in the event of default. Under Capital Homesteading, the proposed capital credit insurance provides a substitute for collateral to enable the lender to recover funds lent, thus insulating from risk any personal assets of the borrower.
Credit, Pure. An interest-free loan made for a feasible productive project. Pure credit is based on a system of enforceable promises, the acquisition of income-generating assets, and the ability of the new assets to generate a future stream of profits for repaying the loan used to acquire them.
In business loans for new capital formation and expansion, pure credit would be monetized as newly created, asset-backed, interest-free money authorized and regulated by the central bank and a competitive system of local commercial banks. The only costs associated with pure credit are transaction/service fees charged by the qualified financial institutions facilitating the loan creation and loan repayment process, and risk premiums for capital credit insurance and reinsurance to cover the risk of loan default. (See “Bank, Central”)
Pure credit differs from conventional credit, which charges interest on the use of already accumulated savings (or depends on non-related sources of income for repayment) to pay the lender a market-based yield on his savings.
Pure credit is backed by 1) the loan paper, 2) the shares purchased with the loan funds, and 3) the present value of the productive assets purchased with the money coming into a productive enterprise from its sale of new shares. Pure credit enables the borrower to finance feasible capital projects that create “future savings” (future profits) that pay for the assets themselves.
Using “pure credit” financing, profits generated by the new capital are first applied to pay off the loan, and thereafter are distributed as dividends to the owners. Under “capital homesteading,” pure credit (reflected in the issuance of newly created, asset-backed money) is also backed by capital credit insurance and reinsurance, which serve as a substitute for traditional collateral to cover the risk of loan default. (See also “Credit, Interest-Free”)
Credit, Self-Liquidating. Loans expected to cover the costs of capital assets out of future profits realized from the productiveness of those assets.
Credit System, Two-Tiered. A key monetary reform under Capital Homesteading that distinguishes between “good” uses of money and credit (i.e., used to finance broadly owned private sector growth and production) and “bad” uses of credit (i.e., used for fueling nonproductive consumer and government debt, or speculation). The Fed’s discount window would be available exclusively to member banks and members of the Farm Credit system for discounting “eligible” paper for feasible, ownership-expanding industrial, commercial, and agricultural projects.
Under this policy, credit and “new money” for Capital Homesteading, i.e., feasible business projects linked to broadened ownership (Tier 1), would be generated “interest-free” through the discount mechanism of the central bank, at a service charge based on the cost to the central bank of creating new money and regulating the lending institutions (0.5% or less). Credit and money for nonproductive, ownership-concentrating uses (Tier 2) would come from past savings (“old money”), and would be charged an interest rate determined by normal market yields on such savings. Under Capital Homesteading, local lenders would add their normal transaction fees and risk premiums for servicing capital acquisition loans, and the new loans would be collateralized by newly issued shares and newly acquired capital assets. Premiums paid to capital credit insurers and reinsurers would be pooled to spread the risk of default.
A Summary of the details of the Capital Homestead Act can be read at http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/
Palindromedary ~ I think you forget that massive debt is a relatively new phenomenon in this country. It is the direct result of a concerted effort where wages simply stopped keeping up with productivity and the cost of living. If you would remember recently it was shown that if wages did keep up with the cost of living the minimum wage would be something like $35/hr.
One very sound theory I heard recently is that the debt fiasco we are now facing is a direct result of corporations skimming OUR WAGES off the top of THEIR PROFITS and then packaging that excess wealth as credit and lending our own money back to us at INTEREST! If you agree with any of that logic then all a jubilee would actually be is to return the stolen wages back to their rightful owners. I'd like to think you might agree that would be a good thing?
one in three Americans has a collection agency after them. But everyone one of them has the latest smart phone and big screen TV.
Here in Canada they just changed the law that collection agencies can't contact your place of employment anymore to garish your wage. Now it is harder to get credit. That will stop a lot of people from going into debt. Hopefully it will but banks out of business. The world would be a lot better off if there was no credit at all.
Aliceinwonderland: I agree with part of what you said about the medical bills driving people into debt. I say "part of" because a lot of people don't live healthy lives which leads to their illnesses. One could blame marketing for the psychological tactics in getting people to eat or drink all of the wrong things to excess. But there are a lot of people who just don't have much discipline and will power. And I cannot say that I am without a bit of sin on that account. It seems to me that a lot of people are willing victims. Then, there are those close relatives or friends who may tend to influence a person into doing what may not be best for that person. They live profligate lives and tend to encourage others to do the same.
I guess I have been exposed to certain relatives who are always broke and crying the blues about it when they go out and spend what little money they have on expensive things like cars. People like that often try to put their money problems over onto their relatives.
I guess I also disagree that these are not just stereotypes that are in the minority. I believe they are in the majority. But, like I said before, when we have a greedy and devious and manipulative few that use all the marketing tricks they can muster from psychology, not many people can resist falling for the decisions that eventually cause their individual economic problems.
True, many people do try to live frugally and may have no other choice to do so given their situation. Low wages, illnesses, etc. And, like you indicated, ever since Reagan's attack on the workers of America, some people can barely stay above water...and it's not their fault.
And wouldn't it be great if all those students did, en masse, refuse to pay their loans. It would be kind of like during the housing crisis when the mortgage loan insurance companies could not, or would not, pay for the criminal bets the mortgage companies were making.
I'm kinda rushed right now...so I've gotta go...for now.
Please sign our petition to have Medicare cover hearing aids under HR 3150. http://petitions.moveon.org/sign/to-pass-hr-3150.fb73?source=c.fb&r_by=6379786
Please repost to all social media. Janice Schacter Lintz, Chair, Hearing Access Program
I can't help but lament the fact that instead of bailing out the people, our president bailed out the banks and Wall Street. I wonder if, when the next crash or crisis comes, President Obama will make the same mistake again?
You can survive debt without using bankruptcy and perhaps collect money from the collectors without ever paying. My book is called "Debt Hope:Down and Dirty Survival Strategies."
Ms. Metcalfe, I’ll confess, it creeps me out that a credit check would even be a factor when one opts to pay in cash; especially when it can be verified that there is more than enough in one’s bank account to cover a major purchase like a new car. That smells rotten to me. It seems this whole credit racket is getting more and more intrusive. They spy on all our purchases, and the means by which they are paid, and invent ways to use that information against us. It’s creepy. More Orwellian shit to deal with as we struggle harder & harder to cling to some semblance of autonomy and privacy in our lives!
The credit card business has gotten WAY out of control.
My credit score happens to be approximately a hundred points lower than yours, Ms. Metcalife. Yet in the twenty years I’ve used credit cards, not once have I made a late payment, carried a balance or had to shell out a dime of interest for anything! I’ve been extremely frugal, all my adult life. I don't believe in living beyond one's means. I’ve also refused to get caught in that net because it isn’t worth all the bloody stress. When you're in debt, somebody else owns a piece of you. I would never play that game unless forced to, by circumstances beyond my control. I’ve been fortunate enough not to have been sucked into the debt trap by a health crisis either. I have always seen to it our credit card bills are paid in full and on time. Yet my score is "good" rather than "excellent". Why? Because the credit card companies don’t like us paying bills in full and on time! They don’t make any money off someone like me, who never pays interest on anything. Too fucking bad! Guess I'll just have to make do with a less-than-perfect score, if that's how they play the game.
I would love to chuck the damn card, jump off the credit bandwagon and just be done with it. But unfortunately there are certain kinds of purchases we make where credit cards are the ONLY option. It seems that as the years go by, this credit racket keeps growing more and more entrenched in our system, so that we are forced to use credit cards whether we like it or not.
We are being controlled and manipulated by the financial services industry and that angers me. - Aliceinwonderland