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To me, it doesn’t make sense. The poorest of the poor work twelve hours a day. They need to sell and earn income to eat. They have every reason to pay you back, just to take another loan and live another day! That is the best security you can have — their life.” The manager shook his head. “You are an idealist, Professor. You live with books and theories.” “But
[I]n a hotel lobby in Branson, Missouri, I met a young man almost in tears, totally woebegone and despairing. He had spent seventy days in Stone County, working day and night, he said, house to house, up hill and down, over those horrible roads; he’d gone to every house, he’d used every persuasion he could think of, talked himself hoarse, and he had not got even ONE man to take a $2,500 loan from the government; and those wretched people needed everything; why, their children were barefoot, some of them lived in log cabins—could I believe it? They NEEDED to be rehabilitated; I had no idea what rural slums they lived in; and here he offered them a loan from the Government—amortized, 25 years to pay it, more time if they wanted it; he offered them horses, and tools, even a car, anything almost and they just wouldn’t take it. They didn’t talk or act like such fools either. He couldn’t understand it. He HAD to get some of them to take Government help or he’d lose his job.
Borrowing to build factories is not the economic equivalent of borrowing to buy television sets, and it’s amazing just how few modern economists can see the difference...Borrowing to produce is the way poor countries become rich. Borrowing to consume is the way rich countries become poor. A vivid example of the latter is the stream of container ships unloading at U.S. ports and going back empty because we have nothing to ship.
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