NationStates Jolt Archive

The current credit crisis that the United States is going through, not only with the housing market, but credit in general really reminds me of the roaring 20's. During the 1920's people were buying everything on credit also, but the problem was that they kept buying on credit, not really paying any real money. Which lead to the 1929 Stock Market Crash. I am seeing the same pattern today. In the 90s and early 00's people were once again buying everything on credit, I knew people who own debt on 7 or 8 credit cards. We were buying things on credit with no real money to back it up again. Will this lead to another stock market crash? I don't know, but from the talk of those on Wall Street and the state of the USA dollar, etc. I think this is going to be worse than a "normal" Recession. What do you guys think?

Ooooh! We can do a modern Great Gatsby! I call Tom Buchanan. I mean don't get me wrong, Gatsby was pretty badass and it would be great to look like Robert Redford, but Snape killed Jay Gatsby, and Tom was a total douche and got everything. He was rich, got the girl, etc.

it is possible...we could just drain the rich of their fat bank accounts and gain solvency that way.

it is possible...we could just drain the rich of their fat bank accounts and gain solvency that way.

and the rich will just simply move their money into off shores account and stop investing in America. Great job, next!

This looks to me like a rather gross oversimplication both of what went on then and what is going on now.

If you want to know about the Great Depression and all that stuff, check up the previous works of a certain Mr. Ben Bernanke. The guy is something of an expert on it.

And that is why I have a debit card, not a credit card.

I believe that as a teenager, you should have a debit card. CCs give too much temptation to waste it all.

DCs means that it's your money, and you have to learn how to use it sensibly.

Same with University. Spend only what you have. If you get a credit card, and realise you have unlimited cash on your card, that's how debts build up.

indeed i am accually surprised i mean debts on 8 diffirent credit cards i knew americans were greedy but that much? i'm dutch meaning i too should be greedy but i would never get my self to such debts, do you people even know how expencive debts are? really and those cc companies shouldn't allow such things to be possible but then i guess they are even more greedy then normal population. ah well its all a game anyway.
but adults should know how to deal with cash i mean they should know that they can't hide thier debts forever and they can't expect to win a lottery so they can repay thier debts i really wonder what are they thinking? i'd better stop talking now before i get angry and say stupid things myself.

Mmm, the sweet sweet stench of capitalism.

/cynic

Mmm, the sweet sweet stench of capitalism.

/cynic

It has nothing to do with Capitalism and all to do with people not knowing that sooner or later they're going to have to pay their debt.

I only have a Debit Card, and I will never get a CC.

DCs means that it's your money, and you have to learn how to use it sensibly.


Apart from the student overdraft (no charges until a year after I leave university) which was too much of a temptation and now i've maxed it out on holidays and new kit. :D

indeed i am accually surprised i mean debts on 8 diffirent credit cards i knew americans were greedy but that much? i'm dutch meaning i too should be greedy but i would never get my self to such debts, do you people even know how expencive debts are?

In the USA being in debt every now and then is more or less a requirement to get a mortgage from a bank. Where in the Netherlands having been in serious enough debt for it to be registered is a reason to refuse a mortgage.
Very different underlying philosophies.

It has nothing to do with Capitalism and all to do with people not knowing that sooner or later they're going to have to pay their debt.

I only have a Debit Card, and I will never get a CC.

It's actually better for the most part if you use a Credit Card, but treat it as if it were a Debit Card. By which I mean only use it when you actually have the money to pay for it.

It's actually better for the most part if you use a Credit Card, but treat it as if it were a Debit Card. By which I mean only use it when you actually have the money to pay for it.

Why ? A credit card costs money to use. A debit card is mostly free.
In countries where electronic banking and paying is not still stuck in the 1950s that is.

Why ? A credit card costs money to use. A debit card is mostly free.
In countries where electronic banking and paying is not still stuck in the 1950s that is.

For starters, there's a rewards program attached to most Credit Cards. Meaning that you can reap benefits for using Credit Cards responsibly.

Also Identity Theft is much less annoying since money stolen with the card doesn't come right out of the account itself, so you're not left broke while the problem gets sorted out.

The current credit crisis that the United States is going through, not only with the housing market, but credit in general really reminds me of the roaring 20's. During the 1920's people were buying everything on credit also, but the problem was that they kept buying on credit, not really paying any real money. Which lead to the 1929 Stock Market Crash. I am seeing the same pattern today. In the 90s and early 00's people were once again buying everything on credit, I knew people who own debt on 7 or 8 credit cards. We were buying things on credit with no real money to back it up again. Will this lead to another stock market crash? I don't know, but from the talk of those on Wall Street and the state of the USA dollar, etc. I think this is going to be worse than a "normal" Recession. What do you guys think?

My bet is that the upcoming recession will be similar to what we had in the 1970s. In fact, our present situation is similar to that in the 1970s - just look at the news....except for the changes in technology, it is almost a carbon copy of what you saw back then.

I would also expect that inflation will start going out of control again - this is going to be one of those recessions where central banks will start cranking up the printing presses, as they have already done. The other thing is that debt that was once held by governments has largely become 'privatised'

For starters, there's a rewards program attached to most Credit Cards. Meaning that you can reap benefits for using Credit Cards responsibly.

Also Identity Theft is much less annoying since money stolen with the card doesn't come right out of the account itself, so you're not left broke while the problem gets sorted out.

Also they make online purchases way easier. I don't think anyone in their right mind would use a debit card online, unless there is some safe way of doing so of which I am unaware.
Which is entirely possible.

Also they make online purchases way easier. I don't think anyone in their right mind would use a debit card online, unless there is some safe way of doing so of which I am unaware.
Which is entirely possible.

International: paypal.
national: electronic banking that allows online payments. That is also far safer than credit cards (and paypal).

International: paypal.
national: electronic banking that allows online payments. That is also far safer than credit cards (and paypal).

Can you use debit cards with PayPal?
Also, being in a country with 1/10 the population of the only neighbouring country, most of my online purchases end up being international.

Can you use debit cards with PayPal?

You can link paypal to your bankaccount. Cards do not even come into play ;)
But since paypal has a bad reputation where non-us customer service is concerned many people dislike that idea.

Also, being in a country with 1/10 the population of the only neighbouring country, most of my online purchases end up being international.

In that case a credit card indeed is more useful, though sites like Amazon usually accept the national payment systems.
It is a pity that not more banks have embraced the wonders of electronic banking.

You can link paypal to your bankaccount. Cards do not even come into play ;)

I did not know that.

It is a pity that not more banks have embraced the wonders of electronic banking.

You'd think that they could make more money that way. How odd.

For starters, there's a rewards program attached to most Credit Cards. Meaning that you can reap benefits for using Credit Cards responsibly.

Also Identity Theft is much less annoying since money stolen with the card doesn't come right out of the account itself, so you're not left broke while the problem gets sorted out.

Some cards give you travel insurance, some give you theft protection, and the best of all - it is easier to dispute charges...since you have not paid it yet.

Credit cards are not the problem. Irresponsible spending is.

Some cards give you travel insurance, some give you theft protection, and the best of all - it is easier to dispute charges...since you have not paid it yet.

Credit cards are not the problem. Irresponsible spending is.

Indeed. My argument is that responsible use of a Credit card is potentially greater than a Debit card.

Some cards give you travel insurance, some give you theft protection, and the best of all - it is easier to dispute charges...since you have not paid it yet.

Credit cards are not the problem. Irresponsible spending is.I have a problem with this statement. While personal responsibility is important and the person that is irresponsible certainly shoulders most of the blame, making something like that readily available to people that are known to have a problem with spending more than they have is negligent and should therefore be subject to liability as well.

Credit Cards don't cost you money if you learn to pay the balance at the end of the billing cycle. No interest charges. It's a good way to build credit but always paying balance off.

Credit Cards don't cost you money if you learn to pay the balance at the end of the billing cycle. No interest charges. It's a good way to build credit but always paying balance off.

While I found the free insurance and bonus gifts argument convincing, this I simply do not get.
I know that US banks want you to have a credit history before they grant you a mortgage - but why ? That one can (barely) handle a $ 2000 debt says very little about how one deals with a $ 200 000 debt with the house as collateral.

and the rich will just simply move their money into off shores account and stop investing in America. Great job, next!

How would they move money they no longer had? Next!

Irresponsible spending is a problem coupled with a desire to live beyond one's means. I suspect though that some people in the United States need credit to shore up a decent standard of living though. In my opinion, the real problem is that people are not making enough money to pay off their debts while some people have more money than they know what to do with. The people in debt have some blame for not sucking it up and living within their means, but the people running the show like to take more than their fair share.

Consider this. (http://financialservices.house.gov/ExecCompvsWorkers.html)

I think that if things continue the way they're going now, with wages for the average citizen staying the same or going down, and the credit problem continuing then the United States may be in for some rough times. It will be rough when consumers suddenly collapse and just can't buy anymore because those bills aren't going away, but piling up. Then the big companies that depend on consumers buying every year are going to be in a lot of trouble.

It has nothing to do with Capitalism and all to do with people not knowing that sooner or later they're going to have to pay their debt.

I only have a Debit Card, and I will never get a CC.

It has everything to do with capitalism - nothing exists in isolation. The drive for consumer goods is irrelevent in a non-capitalist and/or currency-less model. The psychological warfare of advertising is irrelevent. The inbuilt redundancy of new products is irrelevent. The withholding of cutting edge technology to maximise market share on existing products is irrelevent. Product protectionism is irrelevent. 'Brand' loyalty is irrelevent.

The entire capitalist model under which we (most of us) live centres around the maximal acquisition of a finite resource (the currency available) for the minimal outlay, by groups which are willing to justify almost any extent - to market to minors, exploit psychological vulnerability, to lie, to capitalise on addiction, to capitalise on uninformed decision making.... the entire 'for profit' model (as it exists) is omnimalevolent and intrinsically corrupt.

Irresponsible spending is a problem coupled with a desire to live beyond one's means. I suspect though that some people in the United States need credit to shore up a decent standard of living though. In my opinion, the real problem is that people are not making enough money to pay off their debts while some people have more money than they know what to do with. The people in debt have some blame for not sucking it up and living within their means, but the people running the show like to take more than their fair share.

Consider this. (http://financialservices.house.gov/ExecCompvsWorkers.html)

I think that if things continue the way they're going now, with wages for the average citizen staying the same or going down, and the credit problem continuing then the United States may be in for some rough times. It will be rough when consumers suddenly collapse and just can't buy anymore because those bills aren't going away, but piling up. Then the big companies that depend on consumers buying every year are going to be in a lot of trouble.

A large part of it IS standard of living. And we're not necessarily talking luxury items - we could be talking about things as 'mundane' as heating.

Example - this winter, I had to purchase heating fuel, which is expensive, and becoming continuously more so. Gas and electricity suppliers in my area no longer accept 'faith payments' - they will cut you off if you do not clear your account.

For me, and a lot of people like me, some form of credit has been essential - and the 'cost' of credit (whilst unpleasant) does not even make the list of considerations when the alternative is a one-year-old child in a home without heating.

Some people claim they would never use/need a credit card. Those people simply do not live in the same reality as some others amongst us

I have a problem with this statement. While personal responsibility is important and the person that is irresponsible certainly shoulders most of the blame, making something like that readily available to people that are known to have a problem with spending more than they have is negligent and should therefore be subject to liability as well.

Well, there are payday loans too....arguably more predatory than credit card debts. But they have their uses for those who need those kind of services. Then there are those who get trapped into it. We can't take out payday loan services because of the latter. At best we can educate or have information outlets and help forums to help those trapped in it.

Yes, cheap credit is alluring. Introductory 0% APR is tempting. 0 balance on transfer looks good. It pays to read the fine print. Usually the moment you charge anything on the 0 balance transfer card, and you pay for it in the end, it always goes to the low interest part and they keep charging you for the high interest part until you payoff the total.

It was handy for me during my student days when I was scrounging for every little penny. Without judicious use of credit cards, I would have been forced to pay more interest. But I also saw some of my friends sucked into the minimum balance trap. In principal they owed around what I owed, but they were paying a lot more on interest than I was. So, it goes both ways.

How would they move money they no longer had? Next!

Well, knowing Congress, they'll announce their plans to take the money from the rich, thereforth giving them plenty of time to move it to off shores accounts.

I have a problem with this statement. While personal responsibility is important and the person that is irresponsible certainly shoulders most of the blame, making something like that readily available to people that are known to have a problem with spending more than they have is negligent and should therefore be subject to liability as well.


Possibly similar to leaving the keys in your car in the middle of South Central LA. Some people cannot handle temptation. So trick is how do you figure out the ones that are going to go crazy with their credit cards. The only way now is if they show a pattern of abuse.


I have to agree about the type of recession we will be having. This looks all to familiar like the 70's.

Possibly similar to leaving the keys in your car in the middle of South Central LA. Some people cannot handle temptation. So trick is how do you figure out the ones that are going to go crazy with their credit cards. The only way now is if they show a pattern of abuse.I was thinking of a comparison more along the lines of an a known alcoholic with a liver problem being served by a barkeep.

It has everything to do with capitalism - nothing exists in isolation. The drive for consumer goods is irrelevent in a non-capitalist and/or currency-less model. The psychological warfare of advertising is irrelevent. The inbuilt redundancy of new products is irrelevent. The withholding of cutting edge technology to maximise market share on existing products is irrelevent. Product protectionism is irrelevent. 'Brand' loyalty is irrelevent.

The entire capitalist model under which we (most of us) live centres around the maximal acquisition of a finite resource (the currency available) for the minimal outlay, by groups which are willing to justify almost any extent - to market to minors, exploit psychological vulnerability, to lie, to capitalise on addiction, to capitalise on uninformed decision making.... the entire 'for profit' model (as it exists) is omnimalevolent and intrinsically corrupt.

^ This.

Also, as one wise man once said, in a Depression, wealth isn't lost, it is merely redistributed. You'd be shocked at who actually benefits;)

I would not get a credit card even though I think not the cards themselves, but the user is the issue. Unfortunately living short-sighted and thinking short term is a part of human nature. Another issue probably is the credit record, or to say it differently: the fact, that an empty credit record is considered a bad thing. I guess I'm not the only person, who was told to avoid paying something in installments or to get into debt - in the US, it's kinda encouraged for the credit record. That is insane.

The current credit crisis that the United States is going through, not only with the housing market, but credit in general really reminds me of the roaring 20's. During the 1920's people were buying everything on credit also, but the problem was that they kept buying on credit, not really paying any real money. Which lead to the 1929 Stock Market Crash. I am seeing the same pattern today. In the 90s and early 00's people were once again buying everything on credit, I knew people who own debt on 7 or 8 credit cards. We were buying things on credit with no real money to back it up again. Will this lead to another stock market crash? I don't know, but from the talk of those on Wall Street and the state of the USA dollar, etc. I think this is going to be worse than a "normal" Recession. What do you guys think?
There were other problems back then that don't exist now, now unsecure banks and an unregulated stock market. Also, people were buying stocks on credit, not just, say, groceries, and then wasting more money on shares, so I don't credit cards themselves would lead to a stock market crash. But I think most recessions have the common theme of following periods of excessive growth. Just look at the sub-prime mortgage crisis. It was the result of banks lending too much money to too many people.

and the rich will just simply move their money into off shores account and stop investing in America. Great job, next!
It's lose-lose either way. We may as well lose the least and take their moneys.

We could also execute them for treason!

I would not get a credit card even though I think not the cards themselves, but the user is the issue. Unfortunately living short-sighted and thinking short term is a part of human nature. Another issue probably is the credit record, or to say it differently: the fact, that an empty credit record is considered a bad thing. I guess I'm not the only person, who was told to avoid paying something in installments or to get into debt - in the US, it's kinda encouraged for the credit record. That is insane.

I think the underlying idea is that it's encouraged for a person to show that they have the responsibility to have a good credit record. No record is sort of a blank unknown which is, y'know, unknown.

I think the underlying idea is that it's encouraged for a person to show that they have the responsibility to have a good credit record. No record is sort of a blank unknown which is, y'know, unknown.

If I'd show up at 40 years of age and want a loan it shows that I kept my finances in the black numbers all the years before. No message is a message as well, y'know?

and the rich will just simply move their money into off shores account and stop investing in America. Great job, next!

Indeed, that's why the borders should be sealed and we should freeze their bank accounts before arresting them.

You mean the US doesnt learn anything from its past blunders? Egads!

Indeed, that's why the borders should be sealed and we should freeze their bank accounts before arresting them.

It's lose-lose either way. We may as well lose the least and take their moneys.

We could also execute them for treason!

You people DO realize that the top 1% pay 90% of the taxes in this country, right? I mean I'm just trying to make sure because trying to screw over the rich will screw us over too.

You mean the US doesnt learn anything from its past blunders? Egads!
Don't you mean Humans don't learn anything from the past?:D

Ooooh! We can do a modern Great Gatsby! I call Tom Buchanan. I mean don't get me wrong, Gatsby was pretty badass and it would be great to look like Robert Redford, but Snape killed Jay Gatsby, and Tom was a total douche and got everything. He was rich, got the girl, etc.

I was going to read that book! Damn! Now I know what happens!

Don't you mean Humans don't learn anything from the past?:D

Not true. The French learned enough from Vietnam to not join us in Iraq.


Everyone repeats their mistakes. No one repeates them as often as the US. And no one repeats RECENT mistakes as often as the US.

The current credit crisis that the United States is going through, not only with the housing market, but credit in general really reminds me of the roaring 20's.

yes this is certainly the age off the tariff...

:eek: actually the sun rose on every major impact the Earth has ever suffered, coincidence? you decide

During the 1920's people were buying everything on credit

much like every other decade since the invention of banking

the problem was that they kept buying on credit, not really paying any real money. Which lead to the 1929 Stock Market Crash.

one cause among many

it may have led to the burst but to somehow figure this one thing into a cause of a global event is rather odd and unreal

We were buying things on credit with no real money to back it up again. Will this lead to another stock market crash?

no, believe it or not we live in a drastically different world to 1929

I don't know, but from the talk of those on Wall Street and the state of the USA dollar, etc. I think this is going to be worse than a "normal" Recession. What do you guys think?

economic slowdown is the bet I'm making, if anything this is being fueled by talk and the truth that people want to hear

If there's anything I've noticed about economic cycles, it's that they never exactly repeat. Only the most vague outlines do, and as a result you can hardly predict the extent of a given economic event; the next recession could just as possibly be a brutal repeat of the late 1970's as it could be a mild repeat of 2001. Recall that the dot-com bubble, 9/11, and the collapse of Enron et al wiped out a colossal amount of money and jobs, and yet this period has been one of the strongest economic booms for the world economy in its recorded history.

That being said, the Federal Reserve and other banks have done a good job of responding to problems. The only thing we can say for certain is that there is still a long ways to go before this entire mess sorts itself out, recession or no recession.

If there's anything I've noticed about economic cycles, it's that they never exactly repeat. Only the most vague outlines do, and as a result you can hardly predict the extent of a given economic event; the next recession could just as possibly be a brutal repeat of the late 1970's as it could be a mild repeat of 2001. Recall that the dot-com bubble, 9/11, and the collapse of Enron et al wiped out a colossal amount of money and jobs, and yet this period has been one of the strongest economic booms for the world economy in its recorded history.

That being said, the Federal Reserve and other banks have done a good job of responding to problems. The only thing we can say for certain is that there is still a long ways to go before this entire mess sorts itself out, recession or no recession.

The main technique this time round has been to simply pretend we haven't been recessing for three or four years already.

I only have a Debit Card, and I will never get a CC.
Careful, Debit Cards are just as bad. they are a quick form of spending, and worse, they do absolutely nothing to your credit report.

so if your credit score is bad, restricting yourself to your debit card won't improve your credit.

I would suggest talking to your CC company and lower your limit.