Another scene in the ongoing reality play “Death of a Consumerist Economy“:
The credit scores of millions more Americans are sinking to new lows. Figures provided by FICO Inc. show that 25.5 percent of consumers — nearly 43.4 million people — now have a credit score of 599 or below, marking them as poor risks for lenders. It’s unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use.Because consumers relied so heavily on debt to fuel their spending in recent years, their restricted access to credit is one reason for the slow economic recovery. (emphasis mine)
This reliance on debt was deliberately designed, over several decades. An at least partially rational economy, if it insists on leaning on consumption, realizes that people need the MONEY to actually fucking PAY for the crap. Credit is NOT the same as money, as it merely defers & adds interest so you owe even more later, under the assumption that you will always have more money later. As we can see, that assumption has FAILED. All the talk about a “credit crunch” is misdirection, credit never should’ve been as important as it came to be in the first place. You know what people used to borrow for? Big shit like a house or a car, stuff that no one in their right mind would carry around the money for even if they had it. It was a burden that people sought to pay off as soon as possible. Any other use of credit was commonly seen as a sucker move.
It still is. We’re just being led into it at virtually gunpoint now.
Benjamin Tucker wrote that free market banking was one of civilization’s greatest gifts to humans, but that monopoly money was one of it’s greatest tyrannies.
In a free market, it’s hard to imagine that anything other than capital goods, for the most part, would be financed by credit. Consumer goods, it’s hard to see how such, in a free market, could be financed by other’s savings.
Indeed, until the US went totally off the Gold Standard in the early 1970s, there wasn’t anything such as consumer credit for the most part. Today, it’s almost impossible to live without credit and the wealth disparities between rich and poor is the greatest in American history, even exceeding the gap at the end of the roaring twenties.
Progressivism, particularly, Keynesian Progressivism has ended in utter failure. The financial “reform bill” that just passed serves to ossify financial oligarchy and ensure the ultimate functioning of a trickle-down economy. Of course, this is countered by some nonsense of a federal consumer debt protection agency. A perfect example of the essence of “progressivism.”
The utterly laughable thing about this bill is how quickly it is going to be creating artificial rents for exceptions as global finance moves to Asia.
People think that government is held in low esteem now. Just wait.