What to do with the feckless?

[zaza]

It's along vaguely similar lines to the social welfare thread (which became a drugs company thread), but here it is anyway.

It's Christmas, we have a credit crunch among us and we're being told the best way forward is to go and spend money. Regardless of whether this is actually the best course, it seems that there will always be a supply of people who spend more than they have, rack up debt on credit and store cards etc.

What should be done about these people? Leave them to it (and deal with the associated costs of crime / poverty etc that come along with it) or could it actually be cheaper and more beneficial to society to do something about it? If so, what? And who needs to take the responsibility?

[Shaggy Hiker]

Against stupidity, the gods themselves contend in vain.

[Spoo]

The feckless lack one obvious thing... feck.

How can the get it back? Force them to do community service.

[kregg]

As much as I would like to say "Yes, let's do something about it", the harsh reality is that these people who like to spend money will spend money, regardless. It's like smokers who like smoking, no matter how much you tell them off. For these people to stop spending money, they will have to be willing to stop spending for a damn good reason and have the courage to do so. We could as a society set up something where we can try and transform these people, but
1. It would probably increase costs in the process - something we are desperately trying to stamp down
2. The benefits of setting such thing up would probably be zilch in comparison to the downsides of implementing such a thing in society
3. The government would probably pick up on this, and try to take matters into their own hands, which is a very serious gamble to participate. They could either implement a very good solution into society, or they could just end up wasting far more money in total than we as a community would do in total if the project ending up as one big failure.

Perhaps we should realise that at the end of the day, there will always be people that will spend, regardless if there is any money in the bank or not. However, if we all try to do our bit and try to reduce our spending (regardless if we want to save the economy or are just trying to save a bit of money) then it could only do good for the economy. The best way to look at it is to assume that everyone spends lots of money. For the majority to cut down on spending will only mean that we will be in a better position than if we had just continued our spending habits.

[demotivater]

The institutions that extend the line of credit should be the last stop when it comes to those responsible for that debt. Maybe that's too simplistic, apparently there are much grander rules and regulations that I'm not aware of.

Common sense would deem that a lending institution is just another flavor of basic business. If you allow your customers a certain amount of credit, then it is up to you to sponsor that credit, honor it, and hold them responsible for paying it back. There should be no "my client can't pay me so you have to" department in any nations government. Seems simple enough, what am I missing? Bailouts = bullshit. I know that wasn't mentioned by the original poster, but that's the next step. In the U.S., we were told to spend our way out of it as well. Yet, here we are.

Taxation without representation. But that's another thread.

To answer your question, these people should not have been allowed to get themselves into that mess in the first place. The same governments that find we are not responsible enough to decide for ourselves whether or not to wear a seat-belt, smoke among children (or smoke at all), jump on a trampoline without netting, ride a bike without a helmet - or any one of a number of common sense decisions - these governments that mandate our common sense have decided that it's o.k. (if not a right) to give a loan to someone who can't afford to pay it back.

I think the bottom line is smaller government and personal responsibility.

[System_Error]

And who needs to take the responsibility?

It's a personal responsibility. The only thing that could possibly help is better education and better upbringing by parents.

these governments that mandate our common sense have decided that it's o.k. (if not a right) to give a loan to someone who can't afford to pay it back.

Lenders/Brokers don't have much accountability in what happens to the money after they make a sell and get their reward - commission. So there's little motivation for a broker to turn someone down regardless of whether they can pay the money back or not.

[Shaggy Hiker]

They actually prefer to lend credit (in the form of credit cards) to those who can't pay it back. They have dirty names (deadbeat) for people who pay off their entire balance every month, since they don't get interest payments from those folks. What they prefer is people who make steady, but inadequate, payments. They aren't keen on defaulters, but would prefer to force them to pay through legislation rather than restrict access to credit.

It's just a business model. You can take advantage of it or not as you see fit. I don't like the idea of bailing out the credit card companies, but when slops are poured in the trough, I can't fault the pigs for trying to eat.

[abhijit]

Another thing I noticed is that if you always pay the full amount on time, they keep on extending your line of credit, till the point, where you are scared to walk into a store with your credit card.

[Shaggy Hiker]

Yeah, I actually bought Sears one time, when all I wanted was a socket set. I contested the charges, of course, though it was only a few dollars more, but it's the principle of the thing, you know.