Paying off your credit card debt

pauldavid

Jez mon wrote:

Ultimately, neither party has a leg to stand on when it comes to the economy. The Tories of old made grievous mistakes when it came to nationalising utilities.

However, under Labour took over an economy which was growing, and left us one which was on its knees.

Ultimately, if you want to play the blame game, then it's pretty much Labour's fault, there were people, (few and far between) who were saying that the massive period of growth would come to an end. Far too many people were happy to listen to Mr "I've Managed To Escape The Clutches of Boom and Bust" Brown...

In the long term, paying your credit card bills off is exactly what the banks don't want you doing. They want you to pay the minimum each month...

To all of the people who keep referring to the privatisation of utilities by previous Tory governments I would just like to say this.

I work for Yorkshire Electricity and did so during the privatisation.

Prior to the privatisation process my department employed 3 times as many men as we do now. Whilst this was very nice and none of us was exactly pushed on a daily basis it was wrong commercially and was never going to change.

We now have a third of the men and more equipment than ever to take care of. Are we managing? Yes, easily. Does the job always get done? Yes wasily. Is it sometimes a little harder than it used to be? Yes probably.

But ultimately privatisation was the right decision.

For this reason I also agree with the cuts to public sector jobs. My wife was successful in getting a job with our local council after having worked for private companies for the previous 30 years. During her first week at work her new supervisor took her to one side and had a word to suggest she slowed down a little as the amount of workload she was getting through would make everyone else in the department look bad. I also know of people in manual jobs on short term contracts with the same council who are told to get in their vans and park them on one of the local estates to make it look as though they are busy as it looks bad if too many vans are in the car park.

Will paying those made redundant benefits be cheaper than keeping them in jobs that are not required and would never have been sanctioned in a private business where poor decisions like this would result in the company folding?? Absolutely.

And for the record, Should Cameron have told everyone to pay off their credit cards?? YES!!!

If you were angered by the PM telling you how to manage your personal finances give yourself a big pat on the back as you obviously are aware of what you can afford and have it under control.

But please also feel a little pity for those among us(and I know 2 good friends) who have been dragged in by the spend spend spend mentality and now have credit card debts which roughly match their mortgage payments due to essential purchases like a bigger replacement tv in place of the perfectly good 40" unit it replaces etc.

These people (and they are more common than you realise if you start asking questions) seem not to be worried by the fact that they are in this mess and believe they will just go on forever paying everything they own off over ridiculous periods of time and it will be ok.

Unfortunately, relatively intelligent and financially astute people are in the minority. Someone has to say something so why shouldn't it be Cameron.

pneumatic

The planet is a finite resource. It is not amenable to "growth".

We have helped ourselves to proportionately more of the planet's resources per head than most of the world's population. We have called this "growth" but it is only redistribution.

Other countries are now pursuing "growth" to catch up with the standard we have set.

It is simply not possible for everyone to have what we have already got.

And yet we still pursue "growth".

That is just plain stupid.

RoadyForever

Yes if you only pay the minimum balance on credit cards off each month, you never really get anywhere.

But my biggest gripe are payday loan companies. These are feeding off desperate people, not only with insane rates (e.g. 2400% apr!), but if they miss a payment it rockets again, they're loan sharks pretending to be sensible lenders. The government needs to put an end to these.

EKIMIKE

pneumatic wrote:

And yet we still pursue "growth".

That is just plain stupid.

Exactly. It's insane. Unfortunately the adopted system/discourse requires it.

Someone once said capital(ism) cannot abide a limit. (If this doesn't make someone bite i don't know what will :twisted:)

What our economy needs is principles. Not concepts. What we have had for the last 40 or so years is an over-riding concept which has led us to forget fundamental principles.

PS This is interesting and covers alot from changing discourse (politically and economically) to proliferation of credit (including credit cards): http://dotsub.com/view/a241d747-ffa4-45 ... 4bb4323358

superkenners

What ever happened to good old saving up?

Zingzang

Ekimike and Pneumatic, you have restored my faith in human nature.
A lot of people who use forums do so simply to air their views (myself included sometimes) and are not very good at listening to what other people have to say.
Everyone on here would do well to listen to Ekimike and Pneumatic; I mean really listen.

Bozman

Pauldavid, you're spot on with everything you said and i've had the public/privat experience too.
I worked at the Railway during privatisation, probably lost around 60-70% of our staff with alot being union members and old school workers, after things settled down everything ran so much smoother.(I was always a union member just incase the legal side would ever be required, but you start to realise that if you don't make the headlines your Crows and Todds don't give a monkeys about you and when push comes to shove they're nowhere to be seen).
I came from the private side and i couldn't believe the number of people it took to do one job, the overtime was endless, they would make up jobs just to get you in on a sunday for double time. You could claim crazy expenses, you got paid extra money when you took annual leave on the pretence that you could be missing out on overtime while you were on leave, they paid your telephone line rental if you were on-call, even though we all had mobiles, it was endless.
Most of the perks stayed after privatisation because everyone was on a cast iron railway contract.

thecm

A bit off topic but...yes public service industrys have/had their problems...but if the privatized rail industry is so marvellous why is it a) so expensive to use; b) difficult to get a seat and c) even more difficult to get your bike on ?

Bozman

No one said it was marvellous!

EKIMIKE

Don't listen to me, i'm just a debt-ridden student

ooermissus

pneumatic wrote:

The planet is a finite resource. It is not amenable to "growth".

Simply not true. The planet may have some finite resources but it is not a closed system, but one that is continually being injected by energy from the sun. Life, like capitalism, is a complex system that is kept far from equilibrium by this colossal subsidy. Life has been growing like crazy, with setbacks, ever since it got a foothold on the planet.

And the sun is, for our purposes, effectively infinite given that it will burn for another five billion years or so.

Also growth, as the economist Paul Romer put it, is as much about better recipes as it is about more cooking.

Zingzang

ooermissus wrote:

pneumatic wrote:

The planet is a finite resource. It is not amenable to "growth".

Simply not true. The planet may have some finite resources but it is not a closed system, but one that is continually being injected by energy from the sun. Life, like capitalism, is a complex system that is kept far from equilibrium by this colossal subsidy. Life has been growing like crazy, with setbacks, ever since it got a foothold on the planet.

And the sun is, for our purposes, effectively infinite given that it will burn for another five billion years or so.

Also growth, as the economist Paul Romer put it, is as much about better recipes as it is about more cooking.

You are confusing growth with change.

AidanR

On privatisation:

Yes, I think private companies often make efficiency savings, which cut costs, and can lead to a more efficient allocation of resources within the economy. This is all a Good Thing, but where does the money this generates/saves go? For all its economic sense, does it actually benefit society, or does it concentrate wealth, leading to inequality, which has been shown leads to a more disfunctional society?* Surely there's a better way of getting the benefits of private firms without so many of the downsides? More co-operatives, perhaps? The trouble is once wealth becomes concentrated a certain inertia builds...

On growth and resources:

It's great in theory that it's not a closed-loop system and that growth could therefore go on forever. But we need to look at the actual historical evidence for how growth comes about to have a reasonable idea of what is actually likely to happen, rather than what might happen in some idealised world that never has and never will exist. I'd argue that most growth has come through exploitation of finite resources - currently oil and the labour of the poor; in past generations slavery.

We need to get out of this neoliberal mindset of economics being an exact science where pie-in-the-sky theories actually bear any reality to what happens on the ground. They don't. Economics is messy, complex and difficult to pin down, just like humanity.

*Read 'The Spirit Level' for more on this

ooermissus

AidanR wrote:

It's great in theory that it's not a closed-loop system and that growth could therefore go on forever. But we need to look at the actual historical evidence for how growth comes about to have a reasonable idea of what is actually likely to happen, rather than what might happen in some idealised world that never has and never will exist. I'd argue that most growth has come through exploitation of finite resources - currently oil and the labour of the poor; in past generations slavery.

We need to get out of this neoliberal mindset of economics being an exact science where pie-in-the-sky theories actually bear any reality to what happens on the ground. They don't. Economics is messy, complex and difficult to pin down, just like humanity.

*Read 'The Spirit Level' for more on this

Clearly we're dealing with a set of environmental and social systems that are highly complex and which we understand poorly (like an 18th century doctor faced by yet another patient with a disease that's a complete mystery to him).

But that doesn't make lazy prognostications that "it's all running out" very helpful. While fossil fuels ate becoming more expensive to extract, we've probably got too much coal and gas, not too little, if you're worried about the climate (another complex system whose behaviour we can only begin to predict). Possibly oil too.

There's much much more coal being used today than was predicted 20 years ago. The main constraint on coal in the medium term is whether or not we chose to leave it in the ground.

Gas is suddenly massively more plentiful than was expected even 5 years ago - including here in the UK. Oil reserves (the oil in the ground we can economically extract) could double given plausible improvements in extraction technology.

And have you asked poor people whether their labour seems like a 'finite resource' that the world should stop relying on? Nigeria alone needs 30 million jobs over the next 20 years as a tidle wave of young people hit the work force.

They want more opportunities for productive work not fewer.

AidanR

I'm not suggesting that we're in imminent danger of running out of fossil fuels. In fact, we never will - they will simply become too expensive for the majority as they become more scarce. But the "loop" obviously involves climate change - I don't know why you think I wouldn't be including that?

And of course I'm not suggesting that we don't let poor people have jobs. You're either misunderstanding or skewing my arguments. My point is about exploitation of under-priced labour by those in charge of the capital, allowing them to accumulate further capital. This is then classified as "growth" as these people are paid a wage when before they may have engaged in subsistence trades which don't figure in these calculations. In reality much of the growth of the rich has been on the backs of the poor, who are expected to eventually benefit from trickle-down effects which don't always materialise.

ooermissus

On fuel being priced out of reach, maybe but don't point on it. Prices may well be settling at a level that is high enough to cause some pain, but too low to see rapid investment in alternatives.

I'm still wondering where you think this pool of exploited labour is. I guess you mean China where the government is deliberately suppressing consumption in order to favour investment. That's where the big accumulations of capital are to be found (the saving that everyone in indebted countries seems to think we should emulate). They've still bought people out of dollar a day poverty faster than anyone thought possible though.

AidanR

I'm not denying that China has grown, and that the wages of some of the poorest have increased (particularly recently after the Foxconn suicides). That more people are above the (inevitably arbitrary) dollar a day poverty line is to be applauded. But that's only half the story. Inequality has risen sharply over the past 30 years, as shown by the graph below:



If you define poverty within a country as relative rather than absolute (admittedly a measure more useful in developed rather than developing countries) then China has done distinctly less well.

Of course, if this increase in inequality was due to a meritocratic system whereby the hardest working were justly rewarded, then who would begrudge them that? But "63% of this inequality in outcomes was due to inequality of opportunity" over the period 1989 - 2006 (Source: Economist). And just to emphasise how power and wealth are concentrated amongst an elite, "93% of Chinese entrepreneurs cite guanxi—connections with government officials—as a critical factor in business success" (Source: YouGov).

Of course, this growth has come at a high price, both socially through repression and (importantly for the debate here) environmentally. China opens two coal powered plants each week Source: BBC) and has some of the worst desertification in the world. In 2009 it became the world's largest consumer of fossil fuels. So even if you argue China's workers haven't been overtly exploited, it's environment and the world's natural resources certainly have. This kind of growth is simply not sustainable without a serious degradation of the world in which we live, which will (of course) hit the poorest hardest. And we come full circle.

As for fuel pricing, it's a matter of supply, demand and cost of extraction. Demand continues to rise, supply will inevitably diminish and average costs of extraction have been climbing for some time. Long term price rises are inevitable unless we can somehow reduce global demand. Nothing has managed it yet except price shocks and global recessions... i.e negative growth.

EKIMIKE

Whether what we have is finite or in-finite is again missing the point.

I interpreted what pneumatic said as more a question of sustainability. Even though he may not have said as much. So is a continually growing economy sustainable? No.

It's an absurdity. One which leads to absurd practices and absurd decisions. An economy would ideally work towards the benefit of wider society. Our economy works towards the benefit of growth alone. At all costs it seems. Surely everyone can see the injustice there?

Economic growth isn't good for everyone. Even if everyone gets richer (maybe by only £1) and their quality of life is improved (maybe only slightly) the big danger is inequality. Inequality is one of the biggest drivers of social ills. The 'free-market' economic discourse is one of the biggest drivers of inequality.

AidanR

I urge anyone interested in this subject to read The Spirit Level which makes a powerful statistical case that:

1) Developed societies no longer gain from increased wealth, and
2) Inequality in these societies is significantly linked to a whole host of societal ills.

Therefore if we want to improve our societies and our lives, we need to move beyond the mindset of economic growth as our primary goal. Crucially, it's not just the poorest who would benefit from reducing inequality, but everyone in every part of society except those at the very top. 85% of the way up the ladder in terms of national income? You'd still benefit. And if you don't believe me, read the book.

EKIMIKE

Seems interesting. Worth noting there is a critical response called The Spirit Level Delusion.

I don't know what the books exact standpoint on equality is but my opinion is that full equality is simply unattainable. There will always be some form of inequality. It's extent is what matters. Clearly our present system is radically un-equal.

As said before, growth and free-markets work in some area's, in others they don't. The correct mix, the correct balance. It's not a case of one or the other. Unfortunately our nations politics is played out in exactly this 'one or the other' fashion.

In almost all circumstances, there is room for improvement. Economically and socially. Take good from the past whilst leaving the bad behind.

AidanR

The book's stance is obviously pro-equality, but it certainly doesn't call for full equality and neither would I. Hard work must be incentivised through reward. Equality of opportunity is a laudable aim, though. Ultimately, of course, this can't be completely decoupled from equality of outcome.