Hi GM - re: Visa
Thanks for the prognostication of my future!
<..Citi uses part of it to hire you as a janitor...>
That's OK, I think you were joking.
The $1 does not count, I believe, towards GDP. If
KE sells two Jaz drives for $300 each, that adds $600
to the GDP. You pay $300 because you paid cash. I
pay $300 + 18% interest on credit. The GDP increases
$600, the consumer disposable income decreases $654.
That means there are $54 less dollars available for
potential purchase of more goods.
The $54 dollars goes to Citibank, but what are they
providing? They have no goods to offer, but they do
offer the opportunity of putting consumers into
bankruptcy for goods that could have been purchased
less expensively had the consumer chosen to wait.
And, in fact, more goods could be purchased by consumers
if they weren't spending so much on debt service. My own
parents, for example, make an above average combined income.
Yet, they can't even afford to buy a Jaz cartridge because
at the end of the month, they pay so much in Visa interest
that they have nothing left for saving, investing, or goods
purchasing.
-MrB |
