[quote=urbanrealtor][quote=Brutus]Wow. Borrowing Other People’s Money to make money… Sounds kind of like most real estate buyers in America.
But of course, I would NEVER do that![/quote]
And that’s the question of where to draw the line.
Without the ability to secure large amounts of consumer debt (granted much of it is collateralized), economic development takes a huge step back.
This is the same problem with the arguments against fractional interest banking.
Primitive economies are…well…primitive.
Not a lot of consumer debt in Oaxaca or rural Michoacan.
Heavily leveraged economies tend to do well (eg: the US after WWII) but it requires proper risk management.
Dysfunctionally leveraged actors can shrink a whole economic ecosystem (as with the US in 2008 or with the US in 1913 or with the EU today) if they exist in sufficient numbers.
