Debt Lab. Live in debt
A study of debt relations and the synergy and reciprocity of money and debt. A study based on personal experience and empirical contact with tens of thousands of people from different social groups with money projects rational behavioural models which are designed to keep the subjects of commodity-money relations from falling into credit dependency.
On the synergy and reciprocity of money and debt
Money is a medium of exchange that allows people and organisations to buy and sell goods and services. Debt is an obligation to repay money at a future date with a certain interest rate.
Debt creates additional demand for money because the borrowed money must be spent or invested. Debt also creates an additional supply of money because the borrowed money becomes part of the money supply.
Money and debt have a synergistic effect, meaning they reinforce each other. When the economy grows, people and organisations take on more debt to expand their activities, increase their income and raise their standard of living.
This leads to an increase in the demand for money, which is created by banks or central banks. An increased supply of money stimulates economic growth because more money means more opportunities for consumption and investment.
Money and debt maintain the cycle of economic development.
Money and debt also have a reciprocal effect, meaning they limit each other. When the economy slows down or shrinks, people and organisations find it difficult to repay their debts. This leads to increased defaults, bankruptcies and loss of confidence. The demand for money decreases, which becomes excessive. A decreased supply of money exacerbates the economic downturn because less money means less opportunity for consumption and investment.
Money and debt undermine the cycle of economic development.
Den
Bankruptcy and debt
“Bankruptcy” and “debt” are two terms that are frequently encountered in today’s world. They relate to financial problems that people, organisations or nations may have.
Bankruptcy is a legal status that is declared by a court when a debtor is unable to pay his or her debts to creditors. Bankruptcy can be voluntary or involuntary. In the first case, the debtor files for bankruptcy himself, while in the second case, creditors file a lawsuit against the debtor. The purpose of bankruptcy is to liquidate the debtor’s property and distribute it among creditors, as well as to release the debtor from some or all debts.
Debt is the obligation of a borrower to pay back the money he or she has received from a creditor. Debt can be short-term or long-term, secured or unsecured, commercial or government. It arises when a borrower borrows money to finance his expenses, investments or projects. The debt is paid back with a certain interest (interest rate).
Bankruptcy and debt have different consequences for the economy and society. Bankruptcy can be a useful tool for resolving financial difficulties and preventing social conflict. Bankruptcy allows the debtor to get rid of the overwhelming burden of debt and start life with a clean slate. It also promotes the efficient use of resources by freeing property from inefficient owners and transferring it to more productive ones.
Bankruptcy and debt can
Credit addiction
Credit addiction is a condition where a person cannot control their spending and constantly takes out loans to cover their debts. This can lead to serious financial and psychological problems: bankruptcy, depression, stress, family breakdown, etc.
Credit addiction is a real disease that requires treatment.
Causes of credit addiction
Credit addiction can have different causes, but most often it is related to psychological factors.
– Low self-esteem. A person considers himself a loser and tries to drown it out by buying expensive things.
– A desire for social recognition. The person wants to be like or surpass others and spends more than he or she can afford.
– Boredom or loneliness. The person finds no satisfaction in work, hobbies or personal life and seeks solace in shopping.
– Stress or depression. The person experiences negative emotions and tries to drown them out by buying things.
Symptoms of credit addiction
– Frequent and unreasonable execution of loans.
– Constant exceeding of credit card limits.
– Lack of a clear plan to pay off debts.
– Feeling guilty, ashamed, or helpless after buying or applying for credit.
– Ignoring or denying the problem.
Credit addiction treatment
The severity and causes of credit addiction must be considered in the process of fixing the problem. Treatment may include:
– Psychotherapy.
– Medication treatment.
– Financial counselling.
– Self-help.
Credit addiction prevention
Credit addiction is a disorder that is better prevented than treated. Follow some simple rules:
– Live within your means. Don’t spend more than you earn.
– Don’t take out loans unnecessarily.
– Keep track of your finances.