It's Time for Debt Forgiveness, American-Style

[kpete]

It's Time for Debt Forgiveness, American-Style
William Greider

. . . Some people are morally offended by the idea, and not just bankers. Forgiveness sounds to them like old-fashioned bleeding-heart liberalism. Letting failed borrowers off the hook encourages bad habits, they say, the so-called “moral hazard” of inviting others to skip their debt payments too. Forgiveness does require a measure of sympathy—a sentiment in scarce supply among governing elites. Policy wonks and politicians have been taught by a generation of hard-boiled titans and their business-school apologists to brush aside fellow feeling and focus only on the bottom line. The common good, conservatives claim, is best served by adhering to the unsentimental economics of “me first, never mind the losers.” That pernicious doctrine still reigns in the political culture. It is what the people in the Occupy Wall Street movement are rebelling against.

Forgiving the debtors is the right thing to do, because the bankers have already been forgiven. The largest banks were in effect relieved of any guilt—for their crimes of systemic fraud or for causing the financial breakdown—when the government bailed them out, no questions asked.

MORE: http://www.thenation.com/article/164216/its-time-debt-forgiveness-american-style?page=full

[KansDem]

1. There's also a pragmatic side to this...

For example, if student loans can be forgiven, then each of those graduates paying such loans would have more money each month. Possibly several hundred dollars. And that amount would go back into the economy as consumer spending increased.

Think about it: if each former-student with loan debt suddenly had that amount available to purchase goods and services, business would boom leading to more jobs (and more tax revenue!)

It's a "win-win" for all concerned.

(But we'd still have to end the wars and Bush/Obama tax cuts for the wealthy. And we'd still have to bring to justice those individuals who lied us into war and those bankers/brokers who crashed the economy due to criminal acts).

[Fumesucker]

2. LOL.. American style debt forgiveness is all around us..

The 1% get plenty of debt forgiveness, enough for all of us.

Now we just wait for it to trickle down, I'm sure it'll get to our level sooner or later.

[tridim]

3. Credit scores need to reset as well.

My credit was perfect until I was laid off, docked a year of pay and thrown into the street and into a massive recession. My credit score now reflects the illegal actions of my previous boss, not me.

[FreeJoe]

4. As a near-retiree, I'm not OK with this

I've saved money and earned a pension my entire life. My savings is other people's debts. Much of it is in the form of money market funds and bonds. I'm OK accepting the risk that some of the people and companies to whom I have loaned money won't be able to repay. Letting everyone keep the money they promised to pay me whether they can afford it or not is not OK.

Even aside from the direct affect of handing over my life savings to other people, I have issues. If debts can be wiped out when it is convenient for a large number of people, who is ever going to lend money again? How will people find the money for houses and cars? For student loans? Is it really worth it to stiff all the lenders in the world one time in exchange for what will essentially be horrible credit ratings for everyone?

[Lance_Boyle]

8. this

:applause:

[Octafish]

5. Jubilee

Need to start from scratch.
And if the banks, 1-percent, etc., don't like it, tough.
Scrap the system and start a new one where every person owns a piece of the action.

[WinkyDink]

6. Do people who've re-paid loans get any money back? Didn't think so. Grasshopper trumps ant in RL.

[Lance_Boyle]

7. this

:applause:

[jwirr]

9. And the banksters were forgiven for more than tanking the country.

They used terrible lending practices right down to giving money to people they KNEW would not be able to pay it back in order to be able to sell the bad debt to other crooks. They destroyed lives with their practices and they have never even acknowledged it.

[sarcasmo]

10. The proles will never be let off the hook like the Charlatan bankers.