The Case For Layaway

In “The Case For Layaway” by Kevin Drum, Drum is writing a response to an article written by Alex Tabarrok stating that todays layaway plans do not make sense. Drum’s spins a story how families who lack means and the ability to pay for new school clothes use layaway and can hopefully pay it off before school starts. He reveals that this is a scenario that has happened to him as a child. He also suggests that from a purely economical standpoint layaway does not make sense and that one should save money earn interest then buy the products you want or need. Drum counters this and Tabarrok’s argument by saying that in the real world layaway makes perfect sense for those who do not have large amounts of savings and actually commits these individuals to paying off whatever is on layaway by making payments. He even uses evidence to support this point of view by saying that the average interest rate for a savings account is two percent and over a four-month period the interest on a $300 product is roughly one dollar. So in theory saving and earning interest is a good idea however in the real world it makes more sense for families to use layaway to purchase goods. This was a perfect example of a claim and counter claim backed up by evidence and a real world example.

http://www.motherjones.com/kevin-drum/2013/10/case-layaway