E Fiat's Inherent Weakness Is A Plus In Paying Off Mortgages

It's a wonder what borrowed money can do! If Shakespeare's advice to be neither a lender nor a borrower were heeded, the brakes on the consumer economy would leave long strips of burned rubber on the road.' Taint gonna happen, but most of us would agree that we'd rather be neither. Personally, I'd rather be the lender who was not paid back than be the borrower who couldn't pay back.

Several years ago Congress spent a great deal of time and legislative energy tightening the rules for personal bankruptcies... but not for Congress. But that hasn't stopped filings from those who would still like to borrow... despite bankruptcy. Those who never consider bankruptcy to be an option have no choice but to make their home/family economies work.

My parents never liked to borrow money for anything, but they made an exception. They had grown up in farm families that owned some acres of timberland and farmland. My Dad cleared trees for farmland during The Depression, and we pretty much lived off the land until WW2 and health issues forced Dad to seek work in the small town in south Arkansas where I grew up.

My Dad's town job made a daily round-trip back and forth over dark, muddy roads a dangerous chore, especially considering that wartime rationing made getting gasoline and new tires difficult to come by. My parents decided to move into town, and that meant finding a house and borrowing money to buy it. It turned out to be a good buy.

They paid off the note in fifteen years and lived in the house from 1942 until my Mom had to go to a nursing home sixty years later. Some borrowing makes sense since a family may require some things before it has saved enough to purchase them with cash. Debt that lets you do more, produce more, profit more, achieve more is good debt... creative debt. But the dark side of it manifests as debt slavery because it's one thing to pay as you go, but it's quite another to be unable to keep up payments to creditors.

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William K. 10 months ago Member's comment

Those benefits of delaying paying off debt depend greatly on the cost of that debt. If the cost equals the inflation devaluation then it is a zero-sum game, if the cost is greater than the inflation devaluation then it is a net loss to not pay off the debt. So the correct answer is "It Depends."