Why do people in developed countries still fall into the "debt trap" ?

fascinating

Ad Honorem
Dec 2011
2,415
So what do you think we should use instead of water? We don't have enough now to support the existing population.
Was that in reply to me? I don't understand what water has to do with it. Water is being consumed now, and building more houses won't change the amount.
 

tomar

Ad Honoris
Jan 2011
14,049
What I cannot understand is why new houses are not built further out of the boundary of a city. For example London has an outer boundary of about 100 miles long, and let's say houses were built outside it, in a ring one mile deep. That would release 64,000 acres which is enough room for half a million houses which could be sold (at £200,000 each BELOW current house prices) for 100 billion in total, thus basically solving the housing shortage there. So why is it not done?
Who for ? I know many people in London who already spend 3 hours or more daily, commuting.... being far away from work, entertainment , shopping etc.... is not what most people want.... Spending daily anything above 2 hours commuting makes for a very poor quality of life (in fact anything above 1 hours is no fun either)
 

fascinating

Ad Honorem
Dec 2011
2,415
Who for ? I know many people in London who already spend 3 hours or more daily, commuting.... being far away from work, entertainment , shopping etc.... is not what most people want.... Spending daily anything above 2 hours commuting makes for a very poor quality of life (in fact anything above 1 hours is no fun either)
You are suggesting that building houses up to 1 mile further out is going to affect their commute so much? I do have a brother who lives in London and has a grinding daily commute of over an hour, and is tired of it. But there are many people in, for example, Reading, which is well outside London, who commute daily to London, basically because there is a fast regular train service. It could be that the transport system, and its problems, that is a factor in causing housing costs to rise.
 

fascinating

Ad Honorem
Dec 2011
2,415
If you build houses in places where is water, when it is limited you end up farming in the desert.
I don't get the logic. Water is being supplied to people now, what is being proposed here is that they are provided with houses further out, so water use by people will not increase. Would low-density housing, quite probably with a fair amount of suburban tree cover, necessarily cause desertification?
 
Apr 2018
38
Canada
This is about countries with relatively high standards of living and comparatively high revenue with a significant portion of the population in the middle class

Countries where education is mandatory till the age of 16 and where a majority go on way beyond that.

So in essence, a wealthy well educated population.

The average american for example is estimated to have some $40 000 worth of personal debt (not including mortgages). That would be $160 000 for a family of 4. Way above 1 year of average revenue even if both parents are working

Yet the principles of sound financials for an individual/family are fairly simple, and can be summarized as

1. Spend less than you earn, this include:

  • postpone non essential purchases until you have saved the necessary amount
  • live where you can afford it (so outside expensive areas such as city centers), drive what you can afford
  • avoid non essential expense (restaurants, gadgets etc...)
  • avoid any loans except mortgages .... if for any reason a loan cannot be avoided, avoid high interest loans (including credit cards)... never max out on your borrowing (allow for a possible drop in your revenue)
  • optimize your expenses

2. Always keep a reserve of money for emergencies

3. Optimize (mazimize) your revenue


Not rocket science. Yet a significant number of people fail those basics.

Why ?
Queen said it best "I want it all!I want it now!"
 

VHS

Ad Honorem
Dec 2015
4,739
Florania
Queen said it best "I want it all!I want it now!"
The problem is that this means the person does not even understand nor practice even Basic Economics.

I am VHS the Little Poet:

Take it all, learn it all,
Read it all,
What does all mean?

Why should I pick
and tick so often?
Why I cannot get all?

Scarce is time,
Scarce is energy,
Scarce is life,
Get the most of it.
 
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Dan Howard

Ad Honorem
Aug 2014
4,999
Australia
The problem is that this means the person does not even understand nor practice even Basic Economics.
They don't. People buy things because of emotion, not reason. It is a fundamental principle of consumer dynamics and is easily exploited by the adverstising industry.

The real way the economy works is outlined in the book Freakonomics