Wednesday, April 20, 2011

DEBT - April 21, 2011

In the discussion of debt, it is important to recognize the cultures surrounding this institution in our world. The most serious consideration on the part of the lender is whether the borrower has the genuine intent and also the ability to repay the principal, and also the interest, if any. It is usually considered that this consideration must fall upon the lender, if he has any genuine concern for the loan. Of course, in our time, we are familiar with the bankster game of inducing a loan by a borrower who may not repay the principal, but can be expected to submit to usurious interest costs, possibly coming to exceed even a large multiple of the whole loan. This seems to support the whole of the credit card scam, usually foisted upon the unwary. Young adults especially seem to fall for this gambit. In the case of nations, the issue of the willingness and capacity to pay the contracted costs seems to be essential in making the loan. Yet our literature is replete in cases in which the borrower genuinely believes that he will repay somehow, but is without any real motivation to deprive himself to do that, and maybe there will be no way to succeed in that. Any observer seeing the contortions of the two major US parties must realize that the People have been seduced into debt by the inability of either party to remain in elective contention unless they promise to reduce the taxes from which the money to repay the debt will come. Thus we have the canonical situation in which the loan cannot be repaid, even if the debtor wishes he could. In that case, we see extraordinary efforts being made to secure the cost of the debt from someone else. In general, it is the onus of the lender to see that he does not lend to someone who will not pay, even if he wants to. Unless the borrower has the will to exact the debt from himself, or from those who own him, it is the action of a fool to lend him money. So much for confidence.

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