It was an interesting made earlier where someone said debt is good cos you can buy 5 houses and put them on rent instead of one. The obvious problem here is that not everyone can do this and it is in fact just a case of one group (the borrower/landlord) taking advantage of the other (the renter/landlord). A borrower can become wealthy in such a way but how exactly has this person benefitted society because they havent created/produced anything themselves of value.
A basic premise of economics is that people are meant to create things for the society to prosper. Thats not whats happening here. It's completely fucked up. You should not be able to use leverage in such a way. Interest rates should be much higher.
I read parts of Shatapatha Brahmana once (an ancient indian text) and happened onto to the the guidance that borrowers should be charged 20% interest PER MONTH. I think you as we further back in time you would find interest rates much higher than todays levels which simply would not allow for the types of leverage seen today.
High debt stifles innovation, risk taking and freedom. When you have a mortgage to pay you are less likely to leave your shitty job and start a business, or even join a union and go on strike.
A basic premise of economics is that people are meant to create things for the society to prosper. Thats not whats happening here. It's completely fucked up. You should not be able to use leverage in such a way. Interest rates should be much higher.
I read parts of Shatapatha Brahmana once (an ancient indian text) and happened onto to the the guidance that borrowers should be charged 20% interest PER MONTH. I think you as we further back in time you would find interest rates much higher than todays levels which simply would not allow for the types of leverage seen today.
High debt stifles innovation, risk taking and freedom. When you have a mortgage to pay you are less likely to leave your shitty job and start a business, or even join a union and go on strike.