By investigating the problem of usury debt in today's economy the researcher is faced with the need to clearly define the scope of credit or loan itself. On the one hand, the debt as an economic category is a rather narrow and specific object: it encompasses the totality of relations about borrowing money, material assets and their return. On the other hand, these relations are inconceivable outside of social reproduction in its capitalist form. According to the point of view of classical political economy reproduction is constant renewal, continuous repetition of the production process.
Addressing issues of social reproduction as a basic economic problem - reproduction in the broadest sense is a process that involves the entire chain production - distribution - exchange - consumption. Debt load formation during the reproduction process (in particular, in its expanded form) originally inherent in the western mode of management. This fact is due to the existence of the credit relationship, which, in turn, is directly determined by the presence of industrial relations in society. Thus, connection of social reproduction and the debt problem is provided through a loan. Credit inevitably generates tangible or financial obligations of the borrower before the lender moving the cost of some participants of industrial relations to other on conditions of percentage base pay out.
Modern science knows many approaches to the definition of credit. This category can be treated in a legal sense (as a loan deal), in political economy, using the micro- or macroeconomic approach, etc. Economic theory and practice identifies two main types of credit - commercial and bank’s credit (Anderson & Liu, 2013). The first is a credit assisted to each other in...
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Anderson, R. G. & Liu, Y. (2013). Banks and credit unions: Competition not going away. The Regional Economist. Retrieved from https://www.stlouisfed.org/publications/re/articles/?id=2357.
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Sovereign lending, throughout history, has been marked by occurrences of partial default and repudiation by governments of all kind; from medieval princes to dictators to democratic regimes. In the 1970s lending to lesser-developed countries led to the rescheduling and partial defaults in the 1980s. Even the sustainability of the debt of nations such as Belgium, Canada, Italy and even the United States is not free from suspect.
García, J. A. X. E., Zeldin, C., & Lardner, J. (2010). The Credit Card Industry Burdens Borrowers with Unfair Interest Rates and Hidden Fees. In J. Tardiff (Ed.), Current Controversies. Consumer Debt. Detroit: Greenhaven Press. (Reprinted from Gotcha!, Up To Our Eyeballs: How Shady Lenders and Failed Economic Policies Are Drowning Americans in Debt, pp. 37-53, 2008, New York, NY: The New Press) Retrieved from http://ic.galegroup.com.rproxy.iwcc.edu
The Committee on Public Debt Policy. Our National Debt : Its History and Its Meaning Today.
We now live in a society where kids start their adult lives “in the red”, as their debt exceeds their income. (Draut, 2005) 60 years ago this wasn’t the case, as told by Studs Terkel in Hard Times-An Oral History of The Great Depression, “I had no idea how long $30 would last, but it sure would have to go a long way because I had nothing else. The semester fee was $22, so that left me $8 to go.” (Turkel, 1970) Imagine that! 60 years ago tuition was $22 dollars a semester! Furthermore, 45% of adults under 35 state they find themselves resorting to credit card use for basic living expenses like rent, groceries and utilities, (Draut, 2005) adding to their mounting debt. This use of credit puts them into an entirely different category of indebtedness: survival debt. (Draut, 2005) Imagine being forced to borrow to live! (Draut, 2005) If a car breaks down or someone gets sick, the only option available is using a credit card. (Draut,
There is perhaps no other political issue in our contemporary society that is more pertinent, pervasive, and encompassing than a nation’s economy. From the first coins used in Greece and the Asia Minor in the 7th century BCE, to the earliest uses of paper money, history has proven time and time again that the control of a region’s economy is absolutely crucial to maintaining social stability and prosperity. Yet, for over a century scholars have continued to speculate why the United States, one of the world’s strongest and most influential countries, has one of the most unstable economies. Although the causes of this economic instability can be attributed to multiple factors, nearly all economists agree that they have a common ancestor: the Federal Reserve Bank – the official central bank of the United States. Throughout the course of this paper, I will attempt to determine whether or not there is a causal relationship between the Federal Reserve Bank’s monetary policies and the decline of the U.S. economy. I will do this through a brief analysis of the history and role of this institution, in addition to the central banking system in general. In turn, I will argue that the reckless and intentional manipulation of the economy by the Federal Reserve Bank, through inflation and the abolishment of the gold standard, has led to the current economic crisis in the United States.
Williams, Jeffrey J. "Debt Education: Bad for the Young, Bad for America | Dissent Magazine." Dissent Magazine. Http://www.dissentmagazine.org/, 2006. Web. 10 Dec. 2013. .
Daniels Jr.’s editorial regarding college student debt, it is clearly stated that college student debt is known as one of the biggest financial burdens on adults in the world today. In fact, “After tripling in just ten years, college debt totals more than $1.3 million” (Daniels 2*). That is more money than credit card and auto loan debts combined. Daniels illustrates this fact with pathos, drawing out the seriousness of the situation and the effect on the national debt. A solution for college student debt is almost immediately introduced following the presentation of facts. Daniels introduces Income-Share Agreements, which is a program under which, “A student contracts to pay investors a fixed percentage of his or her earnings for an agreed number of years after graduation, offer a constructive addition to today’s government loan programs and perhaps the only option for students and families who have low credit ratings and extra financial need” (Daniels 2*). Here, Daniels approaches the situation by persuading his audience to understand the seriousness of the situation, and open their minds to this idea of controlling how debt is paid off so that the effects of it are not detrimental to the student. Daniels concludes his editorial with an emotional appeal, stating that without implementation of the ISA, student debts will continue to rise, thus hindering not only their life progression, but the progression of the country’s
When compared to countries with a lower amount of national debt, such as the United Kingdom and Sweden, America seems to be built on a foundation of materialism. American materialism influences its society to believe that the more things someone owns, the happier she will be. Many Americans insist on ownership of goods and services, despite how expensive some may be. Even if an individual lacks the necessary funds to afford said goods, however, she can still purchase them by using credit. Credit is money that a bank or business will allow a person to use, provided she reimburses them in the future. The existence of credit encourages people to spend more than they can afford to, ultimately rendering the borrowers slave to the lenders. Abusing credit results in debt, which is a problem that plagues almost every American through most, if not all, of their life. Bad credit and debt are among the worst of problems in America because it contributes towards a progressively unstable state in the economy and prevents many Americans from fulfilling their financial dreams.
Xingzhong, LI Daokui David YIN. "The International Monetary System in the Era of Post-Financial Crisis: What Policy Options Does China Have?[J]." Journal of Financial Research 2 (2010): 005
...: A Critique of the Global Credit Card Society." International Journal of Comparative Sociology 38:1 June 1997, 77-82.
Credit card debt, can be easy to get into, but yet can take years to get out of. Credit card usage has become an increasing occurence in the 21st century for any person above the age of seventeen. Carrying cash has become uncommon for the average man or woman and unlike cash where someone is limited to only what they have in their wallet, credit cards can have upwards to thousands of dollars on them. Granted, there are great things about owning a credit card. For example, in case of an emergency and there is not enough cash to cover the expense, a credit card can be a great back up plan. However, with all the positives there are negatives, the biggest one being, a person can wind up in debt. Thus, credit debt is an individual’s fault, derived
...de, more resources needed to be owned, and more power was needed. Western civilizations are running out of these resources, and this is causing the middle class to disappear. As the resources stopped providing, those living in the middle class began to live on credit. According to Marshall (2010), there is an estimated $1.5 trillion in credit card debt, predominately being carried by 115 million Americans who have monthly credit card debts. As the cost of expensive items such as vehicles, houses, medical insurance, and college education have rapidly increased; the income for the middle class has not improved. America is not the only place this is happening. Countries such as Canada, Greece, Portugal, Britain, and other European nations are experiencing the same debt crises. Rising inflation and increased costs of living are contributing to this debt crisis.
This is supported by the study of Hakim and Haddad (1999) which found that the loan repayment obligations related to income and are an important factor in the possibility of default.... ... middle of paper ... ... According to the Credit Counselling and Management Agency (CCMA) (2012), the main reasons people fail to pay a debt were poor financial planning (25%), high medical expenses (22%), business failures or slowdowns (15%), loss of control over the usage of credit cards (13%), and loss of jobs or retrenchments (10%). Therefore, Lea, Webley and Walker (1995) found that debt with economic, social and psychological factors are closely related.
Warwick J. McKibbin, and Andrew Stoeckel. “The Global Financial Crisis: Causes and Consequences.” Lowy Institute for International Policy 2.09 (2009): 1. PDF file.