> On Wed, 5 Jul 2000, Charles Brown wrote:
>
> >
> > CB: So, that factoid was basically an irony , a demonstration that
> > being broke doesn't really mean being broke, since you can just borrow
> > out of being broke with no negative consequence ? Maybe we've all died
> > and gone to heaven.
>
> Not quite. Why is it that US/Europe dwellers can seemingly live on endless
> piles of debt? My personal suspicion points at a couple of things:
>
Assumming Spain is a fair example, the attittude towards consumer debt in Europe has nothing to do with what one finds here. Even now, in the midst of an unprecedented credit boom, credit card debt is unheard of - most people are not even aware that you can borrow money from a credit card, and regard them as no more than shopping conveniences. If you want to borrow money from a credit card, you have to personally ask your banker not to pay your full balance every month - and you won't be getting any new credit after you do that. Home equity lines are still called "second mortgages" and are another sign the borrower is in deep shit and needs to be cut off.
The banking system also operates differently. All large loans are usually divided up by the banks according to market share. Also, the rising stars in the banking system aren't those who make the most 'sales', but rather the least dumb children of the old moneyed families. This means that there's very little pressure to throw as much money at people as possible, and it's very hard to borrow money for anything other than buying a home or starting/expanding a business.
-- Enrique Diaz-Alvarez Office # (607) 255 5034 Electrical Engineering Home # (607) 272 4808 112 Phillips Hall Fax # (607) 255 4565 Cornell University mailto:enrique at ee.cornell.edu Ithaca, NY 14853 http://peta.ee.cornell.edu/~enrique