Abdulkadir Özkan: "Pay off the debt with debt!

Abdulkadir Özkan: "Pay off the debt with debt!
Date: 3.8.2021 16:00

Milli Gazete columnist Abdulkadir Özkan writes on Turkey's economy. Here is the full article.

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Due to the fact that many workplaces have to be closed due to the pandemic, the state is trying to give a breath of fresh air to small tradesmen by providing low-interest and sometimes interest-free loans in order to prevent the closure of workplaces and not to increase the size of unemployment. However, it is clear that this approach has not been a cure-all so far. Because, unless there is a serious increase in income, it is not possible to pay off the debt with debt. For example, if the monthly expense of a worker, civil servant or pensioner with a monthly income of 3,000 lira is higher than this, his debt will increase a little more each month, so the debt will not end. Moreover, for those whose expenses are higher than their income, the duration of this situation will gradually bring bankruptcy to the agenda and the debt will reach an unmanageable level. In other words, the solution for people to get out of debt is not to lend them, whether they are tradesmen, those who work on a low and fixed income or are retired. The state needs to step in and provide unrequited support or raise them to a level of income that will enable them to survive. In particular, the money to be given as loans with low interest rates will not relieve the borrower or the lending institutions. Because if people are not in a difficult situation, if they can make a living by continuing their work, they will not try to borrow money. Because borrowing brings with it the burden of interest. This is how the system works.
 
So what's the solution to this? I just voiced my first thought. The way to save the sunken person from drowning is to give unconditional support. Secondly, the business life of the tradesmen, in short, the market should be revived and their income should come to a point where they can meet their expenses. Of course, just enough support or income increase to cover the expenses does not bring a radical solution to the problem. It gives temporary relief. As a result, closing the debt with debt does not result in anything beyond making the problem permanent. We were at the same monthly income level as the friend in question. I had difficulty in educating the children and meeting the needs of the house, but while chatting with my neighbor, my acquaintance, he said that he was tired of paying debts, that the debt was not over, and that he did not think that his debt would be over unless there was an abnormal increase in his income. The answer he gave to my question about how he saw the end of the business, the news under the headline "Our tradesmen can't even pay off their debts with debt anymore" in one of our newspapers took me back years. The news in question was like a reflection of a reality that has been lived for years. Because my friend explained his situation as follows:
 
“I have to pay more than my salary every month for years. I couldn't manage to connect the two ends of the rope somehow. If I have to pay 800 lira every month even though I receive a salary of 500 lira, I have to find a loan of 300 lira from somewhere to close my debt. I have no difficulty in finding debt, but since the debt never ends, I have to knock on a door where I can borrow money every month.”
 
"Well, how long can you keep this situation going?" When I said, “I need to find a job where I can get a higher salary or get the unrequited support of someone in my family. However, my family members are also making a meager livelihood,” he said.
 
In our country, those with low and fixed incomes are always struggling to survive. For some reason, the system applied always worked for the well-to-do and the rich. Those with low and fixed incomes struggled to survive without sinking. Before going bankrupt, my aim was to be executed, and it was possible to pay a part of their salaries to their creditors every month.
 
Whether it is a tradesman, a paid or retired person, the important thing is to be able to run the business without sinking into debt. Otherwise, trying to cover the debt with debt means being sentenced to banks for life. This means that millions of low-income and fixed-income people work for global capital owners. Those who set up the order created it like this in the first place. As a result, it does not seem possible for those who have to continue their lives with debt without changing this order and ending the exploitative interest system.

YEREL HABERLER

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