Everyone has heard this sentiment at some point in their lives, often to justify the "service economy." Great goal for an individual, but how does that make sense??
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"Service economy" jobs feed off people who produce products for a living, aka creating value. Without manufacturing, what producers do we have? The tech industry? The whole of America cannot subsist off the tech industry. So what's left? Construction? Farming? America is supposed to survive off providing healthcare and financial services to farmers and Google employees?
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To work in tech, or in most service sectors like finance, law, medicine, data analytics, etc, let's say your IQ needs to be about 1 standard deviation above the mean. That leaves about 80% of Americans in the cold. Overestimation? Maybe, but probably not far from the truth.
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So how does the service economy achieve a 5% unemployment rate? Top service job sectors are education/healthcare with 26M employees in schools, hospitals, and social services, and 23M employees in "government." LOLLLLL
So you have:
- government-funded (or directly government-run) schools, universities, and hospitals employing the biggest chunk of people
- then another 23M people explicitly paid by the government
- then millions of women in the private business sector who are essentially subsidized by government-mandated email jobs
- then the transportation and UberEats sector that feeds off these people's Amazon deliveries and takeout orders
- then the legions of people on disability or food stamps or not making enough to actually pay taxes
- then the remainder of the population that actually creates some kind of value (excluding service jobs like legal, financial, business services, etc)
Our country runs off unlimited debt and pixie dust.
That’s not “predictability”. If someone predictably paid off their debt early every time then that is just as predictable as scheduled. It’s entirely about squeezing as much interest as possible. If “predictability” was the actual metric my friend would have the highest credit score humanly possible, he makes the exact same percentage payment every time, it’s just one that benefits him more than the loaner.
You're arguing for the sake of arguing. I'm not giving my opinion here: I'm describing how it actually works.
When one makes a debt and promises to pay in X cuotas of $200, as a lender I can make plans for that income through time. Any deviation, regardless of whether the debt is paid, creates uncertainty. Even "positive" uncertainty worries me, because it could mean, for all I know, that the person might be impulsive (an unwelcome character trait in borrowers). Many people pay their debts early once they get money because they don't trust themselves not to waste it. Paying early can be an indicator of untrustworthiness.
So, lenders want predictability. Not just of paying the debt: that is not enough. They want predictability of each payment step. That is what determines that the borrower is disciplined and does things as expected.
I suppose the income from the 20% APR on a Hellcat loan doesn't hurt either eh?
Face it, the interest fees are the reason we have usury, and the system is designed to maximize the effective, predictable payment of interest. That's where the money is.
I don't deny it. I'm explaining why early payments hurt credit score. I've made a rational argument which I know is true.
That's rational, but I think ROI is a much bigger contributor as far as regression analysis goes. Lenders don't want people they can't milk.
The lender sets the terms of the contract, you’re now arguing simply for the sake of arguing. If the lender sets the terms and the scope of the terms there’s no “uncertainty” if it’s paid early, in fact they incentive it UNDER THEIR OWN TERMS.
Again, complete conjecture, I gave you an example of someone that pays in specific percentages and gets penalized for it. You’re blowing out your ass to lie at this point, just be honest and say it’s about the interest payments.
Again, complete made up bullshit, most people pay more earlier to pay less overall on the loan. The same reason people…. Refinance at lower rates! Shocking right? Just be honest for once in your life and say it’s about the money, the corpo jargon doesn’t actually work in reality.
Again, a complete lie, lenders want the most ROI, nothing else. Early payments reduce interest returns which costs them expected revenue. Quit lying about “predictability”, I already blew that redundant argument out.
I know what I'm talking about. Credit scores are about predictability. Early payments are unpredictable.
You just proved beyond a doubt you’re full of shit. If someone makes early payments at the exact same percentage it’s not “unpredictable”. Mathematically you’re hilariously wrong and continuing to double down on it shows you’re a disingenuous person. So which is it, are you a complete piece of shit who lies or so stupid you don’t understand what mathematical predictability is? I’d love to know!