102 lines
5.0 KiB
Plaintext
102 lines
5.0 KiB
Plaintext
# The Capitalist Pig-Dog Blog: Expenditure: Debt
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## Apologies
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It's been a bit quiet recently because I've been collecting receipts all month.
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Once I've got a month's worth, I can write a scintillating article about
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shopping expenditure; until then, I'll just have to content myself with a short
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piece on debt expenditure.
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## Time travel
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I've got quite a few debts; modern capitalist economies really are predicated
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on the notion that debt is good. Although this raises a lot of hackles, it
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doesn't bother me too much. If we're going to have money, it might as well have
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a high velocity, and a lot of the objections are from people I'm not predisposed
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to trust. Also, there's very little I could do on a practical level except to
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stop using money entirely. Not impossible, but very much on the outskirts of
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practical.
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=> http://en.wikipedia.org/wiki/Fractional-reserve_banking
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=> http://wiki.mises.org/wiki/Criticism_of_fractional_reserve_banking
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=> http://www.infowars.com/fractional-reserve-banking-government-and-moral-hazard/
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=> https://www.youtube.com/watch?v=ELEwjVRxxGE
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=> http://en.wikipedia.org/wiki/Velocity_of_money Velocity of money
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I will never link to Alex Jones again. I promise.
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Anyway, the basic principle of debt is that you are leveraging your future earnings
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to get something done *now*, goddamnit. As a child of New Labour, I was fortunate
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enough to go to University, but in doing so, I got to experience this concept
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for the first time in the form of student loans.
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=> http://en.wikipedia.org/wiki/Student_Loans_Company
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Fairly simple - the government lends me £12,000 over three years to go to university,
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I pay it back with interest once I've got a decent job. I win, the government
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wins twice (as it gets a higher-rate taxpayer out of it too), and society at large
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wins as well. Certainly in theory.
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Student loans aren't my only credit arrangement, of course; I've borrowed money
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since for various reasons. I don't really have any objections in principle, it's
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mostly a matter of degree
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=> http://en.wikipedia.org/wiki/Usury
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## Analysis
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So what does my current expenditure on loans look like? And where does it go?
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```
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| Item | Monthly payment | Months left | Provider |
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| ------------- | --------------- | ----------- | ------------------------- |
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| Student loan | £300 | 3 | Student Loans Company |
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| Mortgage | £780 | 267 | Nationwide |
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| Personal loan | £430 | 22 | Nationwide |
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| Bathroom loan | £100 | 12 | Barclays Personal Finance |
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| Boiler loan | £ 80 | 36 | Hitachi Loans |
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| Car loan | £300 | 15 | Santander |
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```
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Total: £1,990
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It's not particularly pretty; even on my income, this is too much money on debt
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repayments, any financial planner can tell you that (it's not even the end of the
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story; there's also credit cards and an overdraft to consider, but I'll talk about
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those separately). Just on common prudence grounds, it's imperative that I reduce
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these payments; fortunately, the student loan is almost repaid and the mortgage
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becomes much cheaper in the near future (new fixed-rate deal); that reduces the
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total to around £1500, which is somewhat more sensible.
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In terms of who gets the money, Nationwide - a building society - gets the biggest
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single share, receiving over half of it. The Student Loans Company - a non-profit -
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is another significant beneficiary, at least for now. "Just" a quarter of the current
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total - £480/month - goes to Evil Private Companies.
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A loan can be repaid at any time, so in theory I could shift that monthly expenditure
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to Nationwide just by taking out a second loan; the amount of detriment to the losing
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companies is precisely the interest they lose from my doing so, minus any early
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repayment fees. The Hitachi one is worthwhile, so I'll look at that; the Barclays
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one is not, but is nearly repaid. The car is actually a PCP with an interest
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rate of 0% (I guess they make their money from the VAT dodge), so the point of moving
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it within the term is more or less nil.
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=> http://en.wikipedia.org/wiki/Personal_contract_purchase#UK PCP
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Future loans can certainly be taken out exclusively with mutual organisations.
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Building societies are OK, but alternative models do exist; credit unions are a
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better model, but they aren't that popular in the UK, and my local one, NYCU,
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collapsed in 2012 - I'd actually filled out the membership form the day before
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they went.
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=> http://en.wikipedia.org/wiki/Credit_union Credit unions
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=> http://www.bbc.co.uk/news/uk-england-york-north-yorkshire-20167650 NYCU
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Interestingly, it seems SYCU have expanded to York; they have a branch in the city,
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at least. I've emailed them to ask about membership. I'll see if I can move a
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subset of my concerns there; although I'd be surprised if they can do mortgages!
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The mortgage itself is an interesting thing; I'm paying it instead of rent, and
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that in itself makes it great. I'll see if I can write more about the Evils Of
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Renting later in the year.
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