Amy’s last blog post..30 days ~ Day 30

I don’t think that merely having a credit card, regardless of its limit, is behind the debt and spending problem. It’s lack of education and misuse of said cards. Speaking as someone with a spending problem (I’m not “over it” in the same way that alcoholics are never “cured”) it’s easy to fall into the credit trap. I’m lucky enough to have family and friends who really helped me through that problem, but I digress. Someone who pays off their credit cards in full every month is just as responsible as someone who doesn’t have cards, or has a low limit. Though I suppose having a limit that is still in tangible dollar amounts certainly can keep someone from getting into debt they can’t repay.

Would it be fair to say that it’s not the constance of the growth but the expected RATE of growth (AKA large) that is the problem? In your opinion, what is a perspective less doomed than capitalism?

That’s not to say I am perfect. I save like crazy but I also use that savings to go on expensive trips. I don’t have the required two months back-up salary for emergencies, etc, etc.

But I digress. I agree that the idea of spending money to improve the economy is the idea of stealing from peter to pay paul. But I’m also biased because I think that capitalism, with it’s constant growth model, is a doomed perspective.

@noelle, The debt we’re in is scary and not just for the obvious personal financial reasons. It means that the money people are pumping into the economy has to eventually be paid back sometime, which in theory means it would be coming back OUT of the economy. Would that our national economy were not hinged on overspending and consumption.

yes, there’s a lot of scary stuff going on with regard to spending and teaching children through exposure. (I’m proud to say that Sami always goes for the cash when she opens my wallet. haha) I don’t know how to teach Sami positive values about spending without shielding her from experiences and products that don’t conform to my ideals, and it seems unrealistic that she should have a whole childhood experiencing none of the barrage of bad role models, etc. After a certain age or maturity/awareness level, shouldn’t she learn to think critically about these things, and learn to resist the hype?

Anyway. Not to derail this into another parenting conversation. The things encouraged for adults are introduced to children, and it is scary. Though I haven’t seen the Barbie commercial because I don’t watch commercials (yay DVR.)

http://en.wikipedia.org/wiki/Gross_domestic_product#GDP_vs_GNP

The much shorter version of what I wrote above is: some people believe that the faster the average dollar changes hands, the better for the economy. It’s a theory full of loopholes and mysteries, but it informed a lot of the 80s economy, good and bad.

I didn’t find it boring, but b/c I’m not an economist, I had to read it several times to figure out what it all meant… I am sure I need to read it again.

Cheryl – I think that the debt we’re in is dangerous. I think that the debt we’re teaching our children is dangerous. The amount of people who live beyond their means everywhere, b/c spending is encouraged and people are encouraged to flaunt their money (or an imaginary amount), is supremely scary.

I saw a Barbie commercial where it was a store, and the girls or Barbie (can’t recall which) had an unlimited credit card. Does that not flash DANGER?!?!?!?

It’s all very scary.

noelle’s last blog post..ooooh! 007 Teaser poster

The principle is “The Equation of Exchange”: PQ = MV for any given period:
Avergage price of the goods/services purchases * Quantity of all goods/services = The quantity of money in those transactions * Number of times a dollar is spent (aka the Velocity of money)

If you set the period to 1 fiscal year, PQ equals the Gross National Product of a country. The idea is that every time one dollar changes hands, it increases the GDP by more than just $1.

The problem with this theory is inflation–P goes up, so the GNP looks bigger, but it’s a huge disincentive for increasing V. And while runing up debt DOES increase V temporarily, it’s an illusion that it helps the economy, because for every dollar you deficit-spend, you’re going to have to take (principal + interest) dollars out of V later!

Wow, that was probably really boring.