'Buy now, pay later' is sending the TikTok generation spiraling into debt (opens in new tab)

The vehicles of exploitation might change, but they will be always around. And I don't think as society we are ready or even capable to stop the debt based instruments. I don't think most people would be happy if we banned all but few categories of lending. Let's say vehicles and housing. And maybe even refinancing on housing.

Let's say $20 trillion must flow through the economy per year. People save $1 trillion. Only $19 trillion flow through the economy next year. Usually companies would simply borrow a new $1 trillion through loans into existence. However, with population growth slowing down, companies don't need to grow and invest more so they stopped borrowing. Consumers stepped in until they too thought that they have no need for further debt. To get back to $20 trillion, the government must now borrow money on behalf of all the people who aren't credit worthy enough to borrow money. The more people save, the more the government needs to replenish the circulating money supply just to stay at $20 trillion.

Of course in practice the government doesn't try to maintain a stable GDP, it wants a stable GDP plus some. The reason for that is that increases in productivity necessitate economic growth to maintain full employment. Yes, it's quite stupid. If you have an economy that isn't growing, then increasing productivity will concentrate income within the most skilled individuals even if they have no need for further income, which reduces overall economic efficiency as money is being allocated away from basic needs like housing or food and into the financial market.

Ever wondered why poverty appears to be a "human constant"? Because we think we should give all the money to the most skilled individuals without any regard to whether they actually need that money. When you think about it, jobs shouldn't be allocated to the most skilled, they should be allocated to those who need the money most as their spending will drive further economic activity that then lets the skilled work on useful things. Someone with a broken down car knows better how to spend their money than an investor speculating that you are going to spend your money on a $800 juicer. However, we know that the guy with the broken down car is in distress and we love abusing that situation to our benefit despite the fact that the economic inefficiency is obvious to the naked eye.

If that wasn't true, the lending companies would know there's only little to no profit to be made, and they'd stay out of it.

"BNPL providers are held to far higher standards than Credit Card, Personal Loan, or Payday Loan companies. I'm not sure I understand the HN addiction to attacking them.

Unlike all the examples above, Afterpay doesn't charge interest, has capped late payment fees, and has a very low debt ceiling. It's the perfect way for younger people to learn how to manage debt."

I should have mentioned that their late payment fees are (very) low.

If you want to get rid of BNPL, you'd have to get rid of literally all forms of debt - BNPL is far and away the most consumer-friendly form of debt that I know of.

On the contrary it frees up significant economic resources, and so is obviously good. But access to capital, like the good itself, isn't free. In both cases: Don't buy what you can not afford.

You can sign up to these services at the click of a button and they're also heavily promoted next to payment providers such as Visa. As opposed to them being a separate service you would sign up for, they're integrated into the checkout process as easily as PayPal.

I even saw a service similar to this here in Australia called "My pay now", where they say you can access a portion of your pay early. When in reality you're just borrowing an amount that is a portion of your upcoming pay, with the expectation that you will pay it back when you get paid. The way it was marketed I thought it was a government scheme where you would actually access a portion of your pay early, but no.