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Comment by unityByFreedom | Hacker News Reader

Giving loans is a good thing. With them, as the comment above yours points out, people finance education, cars, and homes that they can afford to pay off later due to having a higher salary than before.

Predatory loans are bad and governments do try to crack down on those. Going from "it's easy to get credit in the US" to "the US lets corporations steal from regular people" is a bit much.

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On the other hand, the abundance of credit has driven up the prices of education, cars, homes, etc.

Car prices in America are among the lowest in the developed world though. It’s difficult to compare education as you’re getting a wildly different product depending on what specific university you go to.

They pretty much have to be. The infrastructure of the US is such that if cars cost what they do in Europe then a massive section of the population would be entirely locked out of the economy unable to hold a job.

When people need something, prices tend to go up, not down.

You've got this backwards.

1. The average American is considerably wealthier than the average European.

2. Cars are so expensive in Europe relative to America due to regulations/taxes/etc which are applied by governments (the alleged protectors of the people's welfare).

3. You've got causation backwards in regards to infrastructure, the US infrastructure is the way it is BECAUSE cars are cheaper, cars aren't cheap due to the needs of infrastructure.

I somewhat agree with what you said, but I think you sidestepped the intriguing question of why so many people in US seem to use credit.

time value of money and capital gains tax make it less efficient to pay cash for large purchases. why don't people in the rest of the world use credit?

Money now is worth more than money later, why is that a hard concept to understand?

For one, I've never felt that way. If I were a business, that might be different.

would you be indifferent to whether your employer paid you at the end of a pay period versus six months later?

Fair point.

That’s why you’ve never felt that way.

I don't know what you mean.

I don't think I sidestepped it. People use credit to better themselves because they can. Maybe you are asking why more capital is available to lend and I think that's a good question.

There is something wrong about punishing people who don't want loans, however. And making it necessary to have or use credit card, so that you build up your credit score in a maze of rule, despite you consistently being able to pay with debit card or cash is exactly that.

They aren't being punished by not using credit cards, they're just choosing not to avail themselves of the benefits of using credit cards.

If you pay your bill every month, then a credit card is like a debit card plus benefits like up to 20% of the purchase value in points, not to mention benefiting from the time value of money.

Credit score matters for whole host of things like when you want to buy a house. So yes, you are penalized for not having it.

> benefiting from the time value of money

This is just nonsense. There is no additional gain from waiting till end of month till you pay.

I'm sorry, my post must have given the impression that I was talking about credit scores instead of credit cards, which is what I was talking about.

As for your other point, if there were no benefit from floating money for 2 months, then there'd be no benefit from doing that an indefinite number of times, which conflicts with the time value of money, an established, mathematically basic concept.

Id rather take a 30 year mortgage out at 4.5% and invest it elsewhere as 4.5% is less than my expected return.

And mortgage rates are much lower than that now too, <3% is quite realistic

I recently heard Denmark has negative mortgage rates for natural born citizens. Losing money if you don't take it.

Giving loans with 0 interest is a good thing, however, giving loans with anything above 0% interest ins a terrible thing. We've known this for literally thousands of years.

If you're willing to give me an interest-free loan then I will take it and invest it in an index. Generally speaking, discounted loans are only available from governments or friends for specific purposes like education or health when they want to invest in people. Even then you still have people taking advantage because money is fungible. It's hard to do this in a sustainable manner.

The premise is that the economy must not be based on loans, it's not sustainable as we are seeing today (not to mention it's parasitic). Loans are given out for charity purposes. If you want to invest your money, there are many moral ways.

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