Question: For you, maybe. I have a huge philosophical problem with debt of any kind.
> > Irrational fear, not based on sound economic principles.
> > >And it is the 20th century kind of thing. You do realize that credit was > > >non-existant in the 19th century when if you bought something > > You do realize that *you* are not living in the 19th century anymore?
> Er, no. He doesn’t realize that. Moreover, he ignores the > fact that credit and debt has been used for _centuries_ and > that it’s not just a 20th century thing. The ease with which > one can arrange it, however, is novel, as well as the ease of > consolidation of debt – charge things at, say, 10 merchants > to one credit card – which wasn’t possible before. But > debt has been used for a very very long time, and there’s nothing > inherently evil in borrowing money. It’s a question of > what you _do_ with that money. Credit is a tool. It can > be used well, and it can be misused.
> > >If you get a mortgage – go into a 5 or 10 year debt, you are vulnerable. What > > >happens if the economy crashes? If you lose your job? If you are unable to > > >make payments?
> [hit return more often!].
> If you don’t get a mortgage and the economy crashes and you > lose your job, then what? How do you pay your rent? It’s > really not very different from paying your mortgage. In > fact, you probably have more leverage with the mortgage – the > bank wants your house less than a landlord wants to boot > you out and rent to someone who does make payments.
> Don’t spent too much time arguing credit with ilya. He’s > probably trying to save up to buy a house by buying gold, > because a savings account is simply more credit…
Answer: Yes credit has been around for ages, what has changed is society’s view of being in debt.
If you watch the old film “Father of the Bride” ,when Buckley tells his father that he has purchased a house his father says to him ” I was not aware you were in a position to purchase a house”,Buckley tells his father actually he is not, they got a mortgage . At the word mortgage Buckley’s mother shrieks “MORTGAGE”! No one in our family has ever had a mortgage .
Indeed before the W.W.II persons usually saved and saved to purchase their own home. Debt was something to be ashamed of “he has debts” they would say of someone if someone was living beyond their means on other peoples money (which is what credit is). The only debt most persons has was the “household”accounts (butcher,grocery store,maybe a department store). These accounts not only meant one did not have to carry large amounts of money on them, they were ways for wife’s to manage their household accounts (and husbands to see where the money was going).
After the war Americas factories were churning out tons of consumer goods, but not everyone had ready cash to purchase a new washing machine or televison. No problem you could get a new TV for “12 Easy Payments”,thus the credit age was begun. Also after the war there was a big push to get those new baby boom families out of rented apartments in the city into those new developments in the suburbs. How to do it? The same way appliance makers got persons to purchase new appliances on credit thus the beginnings of buying a home on credit (mortgage).
It is interesting to note that before 1900 a mortgage was something one took out on property you already owned if one needed to raise cash (much like our home equity loans today).
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