Is it possible to abolish the credit system?

[The Orwell Society]

So here's a unique topic of discussion, we have things all over the world like credit cards, social credit system of China (god don't even get me started on this) and so many other things tied to the word 'credit'. But let's focus on the credit system of America, which quite honestly, I say is similar in structure to the social credit system of China because without good credit, you're cut off from needed things such as loans, homes, anything you may need in life that's important.

Is it possible to abolish this, how would it be done and what would that look like? This thread is mainly for the American credit system, but any will do if we're being honest, especially China's because god is that hell

China's social credit system doesn't exist, what are you talking about?

If my research is correct, it does.

[Soveiniesberg]

China's social credit system doesn't exist, what are you talking about?

If my research is correct, it does.

Well, I'm pretty sure it was proposed around 2012, but it wasn't accepted.

[The Orwell Society]

If my research is correct, it does.

Well, I'm pretty sure it was proposed around 2012, but it wasn't accepted.

Check again… the shèhui xinyòng tîxi, i believe

[Soveiniesberg]

Well, I'm pretty sure it was proposed around 2012, but it wasn't accepted.

Check again… the shèhui xinyòng tîxi, i believe

It's being developed, right?

[The Orwell Society]

Check again… the shèhui xinyòng tîxi, i believe

It's being developed, right?

It has already been established

[USS Monitor]

China's social credit system doesn't exist, what are you talking about?

If my research is correct, it does.

It does, but I've seen no evidence that the average Westerner has the first clue how it works.

How Chinese law works on paper, how it works in practice, and how it is reported in Western media are three different things. Sometimes they are in the same ballpark, but other times they are worlds apart.

[Soveiniesberg]

If my research is correct, it does.

It does, but I've seen no evidence that the average Westerner has the first clue how it works.

How Chinese law works on paper, how it works in practice, and how it is reported in Western media are three different things. Sometimes they are in the same ballpark, but other times they are worlds apart.

Hmmm.

[Saiwania]

The concept of China's social credit system is simple enough, it's a totalitarian regime which is micromanaging individual behavior or actions as a tool for compliance. The more the person isn't conforming to authority or official orders/rules, the lower their score is, and below a certain threshold; it activates escalating punishment or consequences until they're effectively disappeared or worse if they don't cut it out or lay low.

[Meadowfields]

Did you know that you can be a Marxist and criticize the Soviet Union? Not in your mindest, no. Apparently Orthodox Marxists, Eurocommunists, Centrist Marxists, Austromarxists, Reformist Marxists, and Marxist-Leninist-Maoists don't exist.

those are not true leftists, only anti-revisionist marxists are true leftists

Oh yes Marx was not a leftist great. Kautsky was staunchly an orthodox marxist and anti-revisionist, however he abhorred Lenin and the Soviet Union because of their misinterpretation of the "dictatorship of the proletariat." Also, MLM's are fake Marxists? Wtf? They're staunchly anti-revisionist lol. By dictatorship of the proletariat, Marx meant a democratic republic based on communist exchange.

[Makko Oko]

The concept of China's social credit system is simple enough, it's a totalitarian regime which is micromanaging individual behavior or actions as a tool for compliance. The more the person isn't conforming to authority or official orders/rules, the lower their score is, and below a certain threshold; it activates escalating punishment or consequences until they're effectively disappeared or worse.

Hence why I called it similar to America's credit system. If your credit's too low, you get punished, and if you refuse to use credit at all to save your own skin, you also get punished. To get the actual amount of money needed for things typically bought with credit, would take longer to get than you would be alive.

[Saiwania]

Hence why I called it similar to America's credit system. If your credit's too low, you get punished, and if you refuse to use credit at all to save your own skin, you also get punished. To get the actual amount of money needed for things typically bought with credit, would take longer to get than you would be alive.

It's not truly a punishment in the same sense, and plenty of people get by without credit or even good credit. Lenders simply won't know how much of a risk you are, if you have no credit history/profile to your name, hence it is better for them to charge more- if they're not going to deny you to cover the risk of you never paying them back. They want to make money instead of losing money lending to the wrong people.

If you have no evidence they should waste their time with you, you have to make it worth their while; like putting down a security deposit. If you don't want to have to do that, you could take the time to build up some credit, which doesn't take that long.

[USS Monitor]

The concept of China's social credit system is simple enough, it's a totalitarian regime which is micromanaging individual behavior or actions as a tool for compliance. The more the person isn't conforming to authority or official orders/rules, the lower their score is, and below a certain threshold; it activates escalating punishment or consequences until they're effectively disappeared or worse.

Hence why I called it similar to America's credit system. If your credit's too low, you get punished, and if you refuse to use credit at all to save your own skin, you also get punished. To get the actual amount of money needed for things typically bought with credit, would take longer to get than you would be alive.

Buy a used car and move somewhere with cheaper housing.

Not sarcasm. Genuine advice.

[Big Bad Blue]

It could be done, but it would take a long time and basically lead the US into a socialist state because of all the welfare and aid that would have to be given to those who can't afford (literally) to have the system abolished.

With socially-directed production for use replacing oligarchicly-directed production for profit there would be no need for credit. The "work week" would be around 4 hours and everyone would have access to everything needed to live a fulfilling life. Short of that we are going to have to live with a "credit system." (btw for several months until recently our credit score was 850. just sayin')

[Lanoraie II]

Hence why I called it similar to America's credit system. If your credit's too low, you get punished, and if you refuse to use credit at all to save your own skin, you also get punished. To get the actual amount of money needed for things typically bought with credit, would take longer to get than you would be alive.

Buy a used car and move somewhere with cheaper housing.

Not sarcasm. Genuine advice.

Genuinely awful advice. How is someone with bad credit supposed to afford cheaper housing? Moving is expensive, too. Your classism is showing.

[The Blaatschapen]

If my research is correct, it does.

It does, but I've seen no evidence that the average Westerner has the first clue how it works.

How Chinese law works on paper, how it works in practice, and how it is reported in Western media are three different things. Sometimes they are in the same ballpark, but other times they are worlds apart.

10 points to gryffindor.

[Saiwania]

Genuinely awful advice. How is someone with bad credit supposed to afford cheaper housing? Moving is expensive, too. Your classism is showing.

The people who succeed most are said to be those who figure out ways to overcome or tackle challenges, if not make things happen. Those who fail, are those like myself; who wither in the face of any difficulty and let it defeat them. It is similar to excuse making. Whilst the complaint may be real, nobody else is going to care about helping you if you don't sufficiently help yourself or otherwise have enough potential.

Anyone can move, but its another question whether they'll do well or not in their new location. Illegal immigrants do nothing but move from place to place, if they aren't caught and deported.

[The Nihilistic view]

Presumably it would coincide with a crash in asset prices for things like property. But will it help I don't know, maybe a house that goes for 600,000 now will only go for 200,000 with no credit facilities. However if before you could buy that house with a 100,000 mortgage deposit before you now need to save up twice as long to be able to buy it.

So I guess as always it depends on the situation as to whether it's better or not. If you have a lot of cash in the bank you would be quids in though.

A 66% crash in real estate values, would throw this country into a massive depression just about every pension fund and bank would fold

Nothing of this magnitude ever is going to be pretty, I don't particularly think it's the greatest idea.

The biggest problem really is schools don't teach money and tax management, considering it's the basis of life it seems pretty extraordinary to me. I'm not one for conspiracy theories but not teach people really anything about finance at school is the closest I come to thinking maybe just maybe this is one to keep poorer people poorer.

A lot of credit debt is just poor managment. The problem wouldn't be the banks, the problem mostly would be with home owners, trapped upsidown. It won't stop most people playing their mortgage so the banks will still collect their money back. Plus of course even if somebody does default a lot of the loss will be homeowner equity wipeout not the bank's. Pension funds maybe a little more at risk but they tend to invest in commercial property and the way commercial property is valued is diffrent to residential property so the value won't be affected in the same way. I imagine there will be some but not as much as you might think.

The real problem will be lack of consumer credit spending in the retail and automotive sectors. They would potentially really suffer in the short term and that's what would cause a recession.

[USS Monitor]

Buy a used car and move somewhere with cheaper housing.

Not sarcasm. Genuine advice.

Genuinely awful advice. How is someone with bad credit supposed to afford cheaper housing? Moving is expensive, too. Your classism is showing.

No, it's actually very practical advice. You just don't want to hear it because it's not mainstream and you've been told all your life that you need mortgages and car loans, etc, etc.

First of all, I am talking about how to live without relying on credit. I am not talking about how to qualify for a mortgage. Bad credit doesn't matter if you are just saving up money and paying cash.

I also did not say everyone has the money to do this tomorrow, just that you can save up the money in one lifetime. My house cost $60,000 and there's one for sale on the next street over for $45,000. I toured both when I moved up here, and the $45,000 house is not that nice (which is why I didn't buy it), but it is a house you could move into and live in it. In fact, people are living there. It's a safe neighborhood; it's just in an out-of-the-way corner of the country. $45,000 is not an amount that everyone has just lying around right now. You might need to save up for a while, but it is an amount that many people save up for a down payment in a more expensive area.

This is mostly a response to "if you refuse to use credit at all" in the post I was replying to -- not an easy fix for people who have terrible credit because they are already up to their eyeballs in unpaid debts.

It is something I recently did myself. A year ago I was living in a roommate situation, did not have very stable housing, and could not really afford my own place. I moved 350 miles away and now I own a 2BR house which is all paid for with no mortgage.

[Apexiala]

Without a credit system:
- How will a lender know how safe/risky borrowers are?
- How can lenders manage their risks?
- What incentive is there for borrowers to repay if not paying/defaulting has no negative impact on a credit record?
- Without knowing risk profiles of borrowers, most lenders would exit the market. Borrowers would be worse off with less financing options.
- With less financing options most businesses would notice substantial reduction in sales volumes
- How many people who use credit now, can afford to buy a car or home without a loan?

[Risottia]

The concept of China's social credit system is simple enough, it's a totalitarian regime which is micromanaging individual behavior or actions as a tool for compliance. The more the person isn't conforming to authority or official orders/rules, the lower their score is, and below a certain threshold; it activates escalating punishment or consequences until they're effectively disappeared or worse if they don't cut it out or lay low.

Well, put like Sai did... it gives me an idea...

The concept of Western credit scoring system is simple enough, it's a totalitarian regime which is micromanaging individual behavior or actions as a tool for compliance. The more the person isn't conforming to banks and capitalist paradigm, the lower their score is, and below a certain threshold; it activates escalating punishment or consequences until they're effectively starved or worse if they don't cut it out or lay low.

The difference between 1930's totalitarianism and current totalitarianism is that back then it was politicians dictating the rules, nowadays it's bankers.
Best China managed to combine them.