[sologoub]

In general, the availability of credit has been a positive economic factor that helps enable capital expenditures that otherwise would only be available to the wealthiest. Lack of such credit leads to capture of means of production and rent seeking behaviors in economic terms.

However, it’s become more and more clear that not all credit is created equal and what you spend the resulting capital on matters a lot. If one buys a house to live in or equipment to make money with - that’s generally good use of credit, assuming costs do not outweigh the benefits. I can’t think of a situation where buying lunch that one has to finance is a good thing (as different from credit card points harvesting/optimization). The implications of anything similar to payday loans going mainstream feels like a large societal risk.

[Garlef]

Exactly.

Key differences:

- Houses are gaining value over time while consumer goods such as food, phones, TV, cars are loosing value over time.

- A loan for a house can be paid back very slowly so that you effectively only pay your initial share of the price (and share the profits with the loan giver via interest). A loan for consumer goods must usually be paid back almost immediately.

[s1artibartfast]

It isn't just about appreciation. It is about utility and production.

A car loan can be a great investment if it gets you to a job you otherwise wouldn't have, even if it is going down in value.

Debt for an expensive degree that gets you a good job is the same, and entirely devoid of resale value. Debt for an expensive degree with no job prospects, not so.

[7373737373]

This - utilization of credit in a way that helps the borrower pay back the debt can be okay (e.g. cost-effective, productivity raising tractor purchase), while allowing non-productive credit use (e.g. smart tv solely for entertainment or financial asset purchase) leads to individual's debt bondage and in the large, inflationary financial market crises and asset price bubbles

https://youtube.com/watch?v=8FT-zyTX2nE

[s1artibartfast]

Both can lead to those bad outcomes. Many crises have been centered around assets that have some sort productive or utilitarian use.

Housing bubbles obviously come to mind, where there is obvious income and utility potential. Bubbles are about the balance of these return factors with pricing, not a result of their entire absence.

Either way, there is a fundamental question about whose moral authority it is too allow or not allow certain behaviors of others, and what that threshold is.

If I want to buy a smart TV, flashy car, or a case of beer on credit because I value pleasure today over cost tomorrow, who are you to tell me it is illegal?