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You are here: Home > Current Topics > Wanna Argument? > Forever on the Never-Never? > Is borrowing bad? |
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Wanna Argument?Is borrowing bad?Debt isn't bad. Bad debt is bad. There's nothing wrong with making a rational decision to pay more to have something now that you'd otherwise have to wait for, providing it's planned for, budgeted, affordable and as cheap an interest rate as possible. Source: 'Money Saving Expert' Web site. (http://www.moneysavingexpert.com/) During the 1980s, the Prime Minister, Mrs (now Lady) Thatcher encouraged a balanced budget for the country. The success of her governments to achieve this is open to debate. However, Thatcher appeared to believe that economies should be run along similar lines to households: spend no more than you can afford and avoid borrowing. One of the great ironies of the time was that in trying to contain government borrowing, millions of claimants were added to the unemployment figures. The result was a rapid rise in government spending on social security, coupled with a fall in tax revenues. So borrowing is fine, as long as it's done in the most effective way. This means finding the best rate of interest charged on the loan. It also means budgeting for the repayments which have to be made. Borrowers also need to ensure that they can afford to make the repayments over the period of the loan. |
