Quote:
Originally Posted by robertthebard
One of the first lessons I learned about finance, I learned when I was 11 or 12, and that is, you can't spend more money than you have.
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Well, see you hear this alot especially when the tea-party types are talking about the debt they are suddenly concerned about - not lumping you in with them whackos at all btw, just made me think of them as an example.
At 11 or 12 this is a good rule of thumb for a kid to manage his pocket-money or what have you. But as we get older, we learn that finances aren't so simplistic in how they function in the world. Indeed, America is built on borrowing money to create something better. Mortgages for example. Only a very small percentage of the world has the money to purchase their house up front. The rest of us do indeed "borrow from Peter to pay Paul". Otherwise, we'd have nowhere to live. Or no cars to drive. Or credit cards. Or tabs. The list goes on. We're happy to take the risk of losing these things years down the line in exchange for the instant gratification of having them now.
I understand you make a larger point and that there's a context involved in that paragraph. There are concerns that this money may not be returned which is in some ways, a valid concern. But then, we have the same concerns when committing to a house for 25 years.