johnkclark at gmail.com
Wed Oct 24 13:07:39 UTC 2018
On Tue, Oct 23, 2018 at 7:52 PM William Flynn Wallace <foozler83 at gmail.com>
> Thanks John - now the question is: in terms of a household budget, is a
> balanced budget a good thing? (Ignoring mortgages, since few can put down
> the cash.
It's not just a house, few pay cash for a car either, at least not for a
new car. And then there are student loans which sometimes can be a good
idea but can get out of hand. And then there is big credit card debt that
almost always gets out of hand because of the huge interest demanded. So
virtually no household lives on a balanced budget, even billionaires borrow
money, and often this all works out for the best but sometimes it doesn't
so care must be taken.
> > Another question: if they could, should they? They lose the advantage
> of paying back money that is of a lesser value because of inflation,
It's not just inflation. Due to technological advances there will be more
real money around in the future even after the effects of inflation have
been subtracted out, so it will be easier to pay off debt. Because of this
I will make a prediction, if the idea of a technological singularity enters
the zeitgeist to a greater degree than it has now it will cause interest
rates to go up.
And there is another good reason to borrow, you know for sure you're alive
and can enjoy one dollar today, but you don't know for sure you'll be alive
tomorrow to enjoy 2 dollars.
John K Clark
PS: Speaking of money, I didn't win the billion dollar lottery, so much for
my grand plans.
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