I’m with Wu-Tang Financial, mind you: debt, properly used, can be an excellent tool for economic growth. But when you’re teaching your kids, drill them in rules and definitions first. Teaching them when to break the rules is for higher levels of instruction.
5 thoughts on “Tweet of the Day, Teach Your Kids edition.”
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See, the thing about running your business on borrowed money is if they suddenly decide to shut down the world for a month or two, you’re kinda screwed.
True, but sometimes you need to get that car loan because it’s the difference between reliable transportation and unreliable.
This is one of few places Dave Ramsey falls down. No sense buying a car with cash if it only works half the time and gets you fired. Here in the salted-rusty North, you can’t even get a car that cheap due to State Inspection standards.
Usury is one of the vulnerabilities of capitalism.
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Concerns that use someone else’s money to finance their operations have a comparative advantage over other operations.
Until they suddenly don’t.
And failures start to cascade.
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Human nature doesn’t change much, and all the banging on that the Old Testament does about usury and debt is still as relevant as it used to be.
Unfortunately, we’ve forgotten.
Again.
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Debt itself is neutral, perhaps unavoidable.
But if debt is easy, a large percentage of concerns will eagerly trade short term benefit for long term solvency.
It’s one of the vulnerabilities of Loop-hole exploitation. Usury used to be widely prohibited in the Christian kingdoms, with certain exceptions. These exceptions existed so that the kingdoms and their supporters could pay armies better than the other guy like you mentioned.
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Then, of course they declared crusades against the “heretics,” to whom they conveniently owed great sums of money.