I didn’t say anything about compound interest being a purely human construct. The use of compound interest in the standard loan terms is the human construct.
So are you against loans in general? Or do you think the standard terms should be a fixed rate of interest? Or perhaps a lump sum determined at the time of the loan?
I have no idea. You know how BB threads get. Was this the one about the banana thing?
Seriously, though, I just have more sympathy for someone in a no-win situation than I do someone with full agency. Lately, it seems like the no-win scenario applies to more and more people as the default.
And not everyone has the option of living at home, or even of working part-time instead of full.
4 Likes
Good points. I think a lot of the bad taste the article cited put in my mouth has to do with (I think reasonable, defensible) assumptions I’m making about the author above and beyond the fact that he has a lot of student loan debt.
I have noticed there seem to be more young homeless people hanging around downtown these days. I’m still hoping it’s a coincidence or faulty pattern detection on my part rather than part of a larger trend, but it’s hard to shake the feeling you may be right about the no-win scenario applying to more and more people.
While my opinion doesn’t matter because it has as much influence as humans do on rainfall and gravity… Ideally, at least two years of community college should be free, in my opinion. I don’t have a problem with people having to pay for elite schools with loans, though I still think the tuition should be proportionately lower for even elite schools. I think the entire concept of government-backed loans for education creates perverse incentives to drive up the costs of education and has the result of causing people (such as myself and my peers) from delaying major life decisions such as marriage and having children into their 30s (or at all in some cases). Others have pointed out in this thread more issues with the current system.
I don’t need to justify my opposition to the current system with a perfect plan on how to fix it. If I had such a plan and the ability to implement it, I wouldn’t be the type of person who is having this kind of conversation on an internet forum in the middle of the day.
2 Likes
I always am amazed by the little box on my statement stating how long it would take to pay off my credit card making only the minimum payment. It’s usually in the range of 16-18 YEARS for one month’s spending!
We use the card for the majority of spending and pay it off each month, so I’m not worried about it, but the thought of this month’s bills and groceries being paid off over the better part of two decades at 19.99% boggles the mind!
Your judgments are based on something. Call them values, ethics, morals, whatever… they clearly aren’t the same as mine and I disagree with your thesis. You’d probably call it logic, if your responses in this thread are anything to go by. I can intellectually understand something and still be upset/angered/thrilled by it because I am more than my cognitions. A+B=C, but C is fucking ugly. Complaining/whining/whinging is perfectly okay as far as I’m concerned, especially when we live inside unfair systems that we have very little power to opt out of or change.
I won’t be answering your questions or replying to any further posts by you, but feel free to expound on your own point of view without my assistance.
1 Like
Sorry, I should have been clear that my question was intended sincerely. I hadn’t really thought about alternatives to compound interest w/r/t making profitable loans, and thought you might have some good ideas.
And you do! There are some great points here.
I have a rather different take on education in general, though. I think that there would not be much need for college if primary and secondary education were effective (and I absolutely believe primary and secondary education should be free).
And I think primary and secondary education are ineffective mostly for structural reasons, not because of those durned teachers and their unions.
Naah, I don’t worship at that particular altar.
Fair enough. I am contemptuous of the author because I get a strong sense that he is the kind of hypocritical, entitled baby who makes hard-working poor folks like you look bad.
I don’t feel the system has been particular unfair to the guy we’re talking about. I feel this was the crux of our disagreement.
Thanks for writing me off as a libertarian asshole instead of trying to understand my perspective, though! That’s why I love being a liberal; we’re all so open-minded!
Abso-frickin-lutely. If I were Grand Benevolent Dictator, the first thing I’d do is a massive overhaul of the educational system from top to bottom- Not the least of which would involve seeing that good teachers are actually paid the godlike sum they’re worth.
And yet, I think there’s also a side issue closely tied to the larger scarcity/labor/automation issue. If I may hyperbolize to make a point: If we had 40% unemployment and 1000 applicants for every dishwashing job, then as an employer, why wouldn’t I make a college degree and 5 years experience a requirement for every minimum wage position? They don’t need that to do the job, but if there are that many applicants, why shouldn’t I set higher standards?
IMO, there’s not much need for college for many of the jobs that require a college degree right now, regardless of a the effectiveness of one’s primary/secondary education. Period.
3 Likes
Well, ok if you quality for the highest tier manufacturer loans on new cars you could win on the deal, provided you do not buy a more expensive car because you are getting a loan.
Right now Toyota has the offers for a 2015 avalon (a big sedan).
There are three.
0% apr for 60 months plus $1000 cash.
$2500 cash back.
and a two year lease deal.
Taking the 0% apr costs you $1500 in cash, so it isn’t actually free at all right on the face of it. But, you know you only need to earn 1% or so on the $20,000 or so you borrow at 0% to come out ahead over the five years. Certainly could do that if, for example, you were paying down a chunk of your mortgage which has a 3.5% interest rates or a student loan at 4-5%. You won’t beat it with treasury bonds today.
Of course buying a 1 year old car would save you like $10,000 up front, which dwarfs all these other options.
1 Like
If something happens to me, my life savings goes to my nephews, which today will put them through college at a decent school. In a few years, that will no longer be true.
However, I think by the time they are of the age to go to college, the tuition bubble will have burst.
Anyone else think this trend is unsustainable?
2 Likes
My wife and I have a thing that we do when buying a car. We go in and I am dressed like a dork. Well, I’m always dressed like a dork. Back to the story. So we negotiate a price on the vehicle but don’t tell them that we researched it beforehand and know precisely what the dealer price for each model with various sets of features. So we go in, and negotiate and settle on a price that gives them a fair profit over what they paid for a vehicle, somewhere in the 5 to 10% range. Then we get through talking to the salesperson and move to the finance office. We initiate all the paperwork and all the crap we have to do to get the loan prepped by deciding on the warranty and all the other crap they want to sell us… and then they fiiiiiinnnnnnaly ask: “So, how much are you putting down?”
We glance at each other and then say,
“$40,000”
“Whu, forty thousand? That’s almost all of it.”
“Well, we saved up.”
They went through all that haggling with us because they have a tiered approach to making money. Try to get as much as possible on the floor. Then try to make as much with the bells and whistles, warranty, gap insurance, etc. Then try to make as much as possible on the loan. Failing the first two ways to make money, there’s always the last one, because noooooobody comes in and pays cash for a vehicle. And if they do, then don’t let them negotiate the price down up front.
We have to play it this way. If you walk in and say, I’ll pay cash today, they will not let you negotiate that price down. If you play along, and take your time, you can negotiate that price down, possibly get them to throw in an extended warranty, and then sucker punch them with your downpayment.
It’s the only way.
I’d do it with student loans if they’d let me negotiate with them…
6 Likes
For those of us who think “that’s just how loans work” remember that most people need a special-purpose tip calculator app to figure out what 10% of their meal total is.
The realities of finance aren’t really taught very well in school. That you could still owe almost as much as you did at the beginning after paying thousands or tens of thousands of dollars is counterintuitive. The finance industry depends on it. It’s largely a con game to get people to sign because “that doesn’t sound so bad!”.
Consider the rent-to-own places, where you can get a new computer for only 5 or 10 times the retail price (or more)! With those, it’s pretty obvious since you can easily compare to current retail prices. And readily see that in 5 years, when you’ve paid it down enough to buy it out and end the payments, it would still be cheaper to buy a new one than finish payment on your half-decade obsolete one. Yet they still do business.
4 Likes
If white people (“privileged” is your reframing of people slipping out of the middle class) don’t crack the lid on bullshit, who will listen? A warrior like you? Obviously not.
I worked 2–at times 3–jobs during undergraduate and graduate school. During my 4 years in undergrad (I graduated on time thanks to AP credits), my fees went up 600% and tuition more than doubled. My full scholarship covered most, but not all, undergraduate tuition and fees. The year I entered grad school, they eliminated all teaching assistant positions in my humanities department, while also eliminating research funding for professors (who were obliged to seek private funding). I went in-state to a decent public university for both degrees. I racked up $30,000 in loan debt.
It’s not that people like me, who may never be in a stable enough position to pay off student loans, want “something for nothing.” It’s that many people in prior generations, or in more economically privileged positions, put in the same amount of work, or less, and get more net benefit, and many of them turn around and blame young people in my position for being losers. That’s all well and good, but wait and see what happens when the student debt bubble bursts. My generation will never be able to pay off the debts that are the result of a previous generation’s folly.
4 Likes
To be fair, any situation you look at in detail, will be specific and limited in scope the closer you get to the actual material conditions of that situation. Abstracting about broadly grouped situations is only possible to the extent that we ignore the specific conditions of each situation.
The history of anarchism in Spain (since that is the reference point here) yields a lot more material than one might think on the subject of autonomous infrastructure and alternative possibilities. Homage to Catalonia (Orwell) and The Spanish Cockpit (Berkenau I believe?) are excellent English books on the topic.
There is more to anarchism’s contribution to our present situation, however, e.g. labor laws won by struggling anarchists and socialists in the 19th and early 20th centuries. I think a lot of people just take for granted that those movements were eventually wiped out by 2 world wars together with a generation of outsourcing and McCarthyism, and don’t stop to ask how that happened; usually the fact is simply taken as a sweeping judgment on the success of such movements and the alternatives that they continue to teach us.
1 Like
When I bought my Prius C last year, I got 0% and the dealership was surprised I put a good chunk of money down anyway. Even without interest, I would still rather just pay the thing off that much more easily.
We have a fairly low mortgage payment so we’ve been throwing an extra $200-$300 at the principal every month. We have paid off 1/3 of the principal In 5 years’ time, moving the last payment date from 2040 to 2032 even if we stop making the extra payments now (which we won’t, unless we run into hard times). I expect to have it paid off in 2025-2026.
2 Likes
