One view of government involvement in the economy

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One view of government involvement in the economy - 3/8/2014 9:39:11 AM

MercTech

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quote:

One cold night, as an Arab sat in his tent, a camel gently thrust his nose under the flap and looked in. "Master," he said, "let me put my nose in your tent. It's cold and stormy out here." "By all means," said the Arab, "and welcome" as he turned over and went to sleep.

A little later the Arab awoke to find that the camel had not only put his nose in the tent but his head and neck also. The camel, who had been turning his head from side to side, said, "I will take but little more room if I place my forelegs within the tent. It is difficult standing out here." "Yes, you may put your forelegs within," said the Arab, moving a little to make room, for the tent was small.

Finally, the camel said, "May I not stand wholly inside? I keep the tent open by standing as I do." "Yes, yes," said the Arab. "Come wholly inside. Perhaps it will be better for both of us." So the camel crowded in. The Arab with difficulty in the crowded quarters again went to sleep. When he woke up the next time, he was outside in the cold and the camel had the tent to himself.

Tongue firmly in cheek....

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RE: One view of government involvement in the economy - 3/8/2014 9:55:01 AM

kdsub

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Without government interference here in Missouri our wonderful self governing banking industry was charging 1,900 percent interest on payday loans... to our military...Well our wonderful conservative legislature put a stop to that!!!!... now they are only allowed to charge 36 percent.

But the rest of us just 500 percent interest.. Damn how can they make it with only 500 percent...sheeeee.. and the loan can be rolled over 6 times... and a required extended payment plan that is mandatory need not be told to the borrower.

Damn government involvement.

Butch

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RE: One view of government involvement in the economy - 3/8/2014 11:23:17 AM

Kirata

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quote:

ORIGINAL: kdsub

Without government interference here in Missouri our wonderful self governing banking industry was charging 1,900 percent interest on payday loans... to our military...Well our wonderful conservative legislature put a stop to that!!!!... now they are only allowed to charge 36 percent.

But the rest of us just 500 percent interest.. Damn how can they make it with only 500 percent...sheeeee.. and the loan can be rolled over 6 times... and a required extended payment plan that is mandatory need not be told to the borrower.

What is the fee to cash a personal check? It's typically 10% and they verify funds. When you take out a payday loan, you're asking somebody to cash a BAD check, without obtaining a credit or background report, in the hope that you'll make it good two weeks later. At brick-and-mortar lenders, the fee for that is typically 15%. Those ridiculous interest rates that the anti-payday loan crowd likes to tout are for a one year loan at 15% interest every two weeks! In other words, they're pure bullshit.

K.

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RE: One view of government involvement in the economy - 3/8/2014 2:38:54 PM

kdsub

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"The legislation also would remove the state's 75 percent cap on interest and fees for payday loans. Under the current cap, lenders can charge $75 on a $100 loan, which leads to an annual interest rate over 1,950 percent for a 14-day loan."

Figure it as you will... in the end it is 1,950 percent...Most people when seeking information expect to get the yearly interest rate... well here it is.

Of course it would only be that if they did not pay it off on time... but in Missouri they can roll the loan over up to six times legally..and the lender is not required to inform the borrower of the 120 day extended pay off period.
Butch

< Message edited by kdsub -- 3/8/2014 2:46:03 PM >

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I don't see any use in having a uniform and arbitrary way of spelling words. We might as well make all clothes alike and cook all dishes alike. Sameness is tiresome; variety is pleasing

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RE: One view of government involvement in the economy - 3/8/2014 2:56:27 PM

MercTech

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15% for a two week loan.. sounds like pawn shop rates to me.

And I'm enough of an old fart to remember when the SEC regulations had the absolute maximum interest cap set at 18%.
(Pawn Shops didn't come under banking regulations)

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RE: One view of government involvement in the economy - 3/8/2014 3:00:10 PM

kdsub

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Not 15 percent for a 2 week loan... 75 percent to the general public and 36 percent to those in the military. Most states have made payday loans illegal... not good old Missouri... more like legal state authorized loan sharking to me.

As you can imagine the payday loan industry made large political contributions to the Republican legislature.

Butch

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Mark Twain:

I don't see any use in having a uniform and arbitrary way of spelling words. We might as well make all clothes alike and cook all dishes alike. Sameness is tiresome; variety is pleasing

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RE: One view of government involvement in the economy - 3/8/2014 3:18:32 PM

MercTech

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Naaa, payday loan places are not banks, do not come under banking regulation, guarantees, or restrictions. The only regulation on them is by local or state ordnance.

Unless curtailed by local law, and not being a bank and subject to federal law, they can do as they please as long as they do not discriminate in their customers. Yes, they target and bilk the stupid and desperate but there is no federal protection for that.

I went into one of those check cashing places once.

One company I often do contract work for pays their per-diem in a physical check. In the days before internet and photo deposit of checks you had to either mail the check to the bank and take a week for it to get into your account or find somewhere to cash a check. So, here I was with a check in hand and little cash in pocket since I'd just gotten a discount on a week in the hotel for paying cash. So, I went to the shop in the strip mall across from the hotel with a big sign in the window saying "We Cash Checks".

I showed them the corporate check and the girl at the counter says "Oh we don't do that. We accept post dated checks at a discounted rate". I paused and said "$10 will get you $20 on payday?" (the usual rate of the shipboard loan sharks) She pipes up "You got it, Sailor". She didn't cash my check but schooled me about Walmart and the fact that they will cash a check for $3 per $1000 ($3 minimum fee for cashing corporate checks like paychecks) with a weekly maximum of $3000.

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RE: One view of government involvement in the economy - 3/8/2014 3:28:05 PM

kdsub

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I agree...not banks... lets just say lending institutions designed to rob the gullible trying to eat and make a house payment....and politically backed by state politicians through campaign contributions.

Butch

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Mark Twain:

I don't see any use in having a uniform and arbitrary way of spelling words. We might as well make all clothes alike and cook all dishes alike. Sameness is tiresome; variety is pleasing

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RE: One view of government involvement in the economy - 3/8/2014 7:39:46 PM

Kirata

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quote:

ORIGINAL: kdsub

I agree...not banks... lets just say lending institutions designed to rob the gullible trying to eat and make a house payment....and politically backed by state politicians through campaign contributions.

You might find this interesting, if you're able to tolerate a view that differs from the one being promoted by witch-hunting do-gooders.

http://www.theatlanticcities.com/jobs-and-economy/2013/09/why-poor-choose-go-without-bank-accounts/6783/

K.

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RE: One view of government involvement in the economy - 3/9/2014 11:11:08 AM

Moonhead

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quote:

ORIGINAL: MercTech

Naaa, payday loan places are not banks, do not come under banking regulation, guarantees, or restrictions. The only regulation on them is by local or state ordnance.

Unless curtailed by local law, and not being a bank and subject to federal law, they can do as they please as long as they do not discriminate in their customers. Yes, they target and bilk the stupid and desperate but there is no federal protection for that.

And you seriously think that government regulation would worsen that situation intolerably, if State and local authorities aren't up to intervening?

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RE: One view of government involvement in the economy - 3/9/2014 11:41:06 AM

MercTech

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I think historically, Robert Heinlein pegged it saying that anything a big government tries to do to an economy acts as positive feedback and causes things to cycle out of control.

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RE: One view of government involvement in the economy - 3/11/2014 3:03:46 PM

joether

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quote:

ORIGINAL: MercTech
I think historically, Robert Heinlein pegged it saying that anything a big government tries to do to an economy acts as positive feedback and causes things to cycle out of control.

Ah, the subtle 'big government' verse 'limited government' issue....

Yeah, I find all the 'limited government' types at a lost of words when I asked them, 'how would a limited government handle a major flooding of the Mississippi River?'. Since we know from history, that river does tend to over flow. An that 'evil' big government has taken steps to protect and mitigate future major flooding. Its not to say it will never happen again, but planning and construction will do much more than doing nothing at all!

An if another nation invades us, how will that 'limited government' protect the nation? Yeah, lets look to Ukraine with its 'limited government' and 'limited military' (compared to the USA...). Don't seem them violently pushing Russia out of its area, do you? Anyone that is dumb enough to take on the #1 military on the planet is either stupid or insane (more likely both).

Big government has one concept in economics that the limited government does not: scale of economies.

Oh, and switching the nation to a limited government would result in a staggering lost of jobs from the private sector. You think the unemployment situation in 2007-2009 was bad? This would be fair worst. And I know PLENTY of conservatives and libertarians on here alone (not to mention in America) that Bashed the President for those high unemployment numbers.

The real issue is, that the size of government does not have any bearing on a good or evil government. But that a big and good government seems to help the nation's economy out pretty well. Most intelligent people without basis understand the ARRA of 2009 prevented the United States from slipping into a full on, economic depression. Could a 'limited' and good government have done the same? I'd be surprised if it could....

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RE: One view of government involvement in the economy - 3/11/2014 3:50:08 PM

MercTech

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Major flooding on the Mississippi.

Is it the job of the Army Corps of Engineers to build and maintain levees or to provide technical expertise for the states along the river to maintain flood controls? The difference would be large inefficient federal control or federal assistance to local government which may or may not be competent or crooked as a snake in a drain trap.

Disaster relief is primarily done with a call out of the National Guard in the state where there is a problem. If the prez so orders; the Federal Emergency Management Agency will step in and coordinate relief efforts. FEMA has some absolutely lovely multi million dollar motor homes outfitted as command centers. Initial recovery is done by volunteers. After stabllization contracts are let for companies to work on recovery.
Incidents of FEMA making very questionable deisions and directives after hurricane Katrina are legion. The turning away of relief volunteers at the same time telling affected people they didn't have the manpower to help was particularly aggravating to the people who were devastated.

One of the things we should have learned from the decline and fall of the CCCP is that big centralized government control is inefficient and creates many repeated failures in real world implementation of policy.

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