You are currently browsing the tag archive for the ‘consumption’ tag.

…debt can be used to finance four different financial transactions:
1. productive investment
2. innovation
3. consumption
4. speculation

The first two add to the productive capacity of an economy. When the government builds roads, dams that produce hydro-electric power, or other infrastructure projects, debt is being used productively. Similarly, when debt is used by companies for research and development or new ventures, it may lead to the production of new goods or services, which then can lead to an expansion of GDP.

Debt that is used for consumption, however, is considered a dissipation of capital. Nothing is produced; rather, something is consumed. After something is consumed—such as a basic necessity like food—the debt remains even though the item consumed no longer exists. When debt is added for consumption purposes it enables the debtor to pull tomorrow’s demand forward into the present. As debt is used to expand consumption in the present period, it is in essence borrowing from the future therefore reducing future demand.

Debt taken on for speculative purposes is also unproductive as it can lead to asset bubbles or overinflated prices for assets. Eventually all asset bubbles go bust. The overinflated asset values decline but the debt still remains. Think of the recent housing bust and the technology bubble as an example of speculative bubbles financed by debt for unproductive purposes.

from this article.

So, “Is debt good or bad?”

My response, “Debt for what?”

… being persuaded to spend money we don’t have, on things we don’t need, to create impressions that won’t last on people we don’t care about.

One interesting idea is the quadrants formed by self-regarding to other-regarding behaviours axis and novelty-seeking to tradition/conservation axis. He argued that our systems systematically encourage one narrow quadrant of self-regarding and novelty-seeking behaviour. Therefore the solution is not about changing human nature, but opening up the breadth of human possibilities.

First of all, in this Year of Tiger, 虎 (you) wants to be a millionaire?

To me, I have no interest in being a millionaire. I just hope my income (if not sufficent in the time of difficulties) and wealth can cope with my consumption in my lifetime:
Stock and flow map of income, Wealth and consumption

So besides trying to increase my income and wealth to meet my consumption rate, I also control my consumption by spending only on the true needs.

That’s why I can be happy.

… is my first response when reading this news.

It begins with the following questions:

If someone were to give you $10,000 for home improvements, how would you spend it? Would you pick ways to make your house look better or choose upgrades that would make your home more energy efficient?

Overpopulation, or over-consumption?

No, not a question of either/or, it is BOTH.

The earth may support 7 billions Cubans,
but only 2 billions Americans.

An idea linking the reductions of birth rate and consumption together.

Poor can give birth by terminate the contract.

Latest Tweets


Blog Stats

  • 5,649 hits
Creative Commons License
unless otherwise noted.
%d bloggers like this: