Popping The Great Debt Bubble
March 2, 2020 10:05 AM Subscribe
“Millions of debtors, isolated, are owned by the banks. But if you’re part of a collective that owes $14.15 trillion, you all own the banks.“ Debtors of the World, Unite! Debt’s ubiquity is a burden, but also an opportunity. (Boston Review)
When collections agencies are calling daily, you probably don't feel you have the power to say, "fuck you, you have to deal with my debt", and, you probably don't.
posted by Windopaene at 8:08 PM on March 2, 2020
posted by Windopaene at 8:08 PM on March 2, 2020
If you take on debt collectors on your own then no, that won't work — and that's the entire point. There are a number of real-world examples in the posts to illustrate how banding together has worked already.
posted by romanb at 1:56 AM on March 3, 2020 [3 favorites]
posted by romanb at 1:56 AM on March 3, 2020 [3 favorites]
"When you're $100,000 in debt, it's your problem. But when you're $1 million in debt, it's the bank's."
—Rosalie Goes Shopping (1989 film)
posted by sonascope at 6:18 AM on March 3, 2020 [4 favorites]
—Rosalie Goes Shopping (1989 film)
posted by sonascope at 6:18 AM on March 3, 2020 [4 favorites]
What makes moral thinking on debt fluctuate?
I think this is the biggest issue. Paying back debt (if you are lower class, and this is through marketing, religion, and peer pressure) is the most important thing in the world, up to and including jail time or death. It's a moral issue, with your soul on the line, not a business decision.
This morality goes farther with people wishing for things like economic crashes to wipe out those with high debt loads to begging for higher interest rates, with the low quality logic of both giving people who already have lots of money higher returns and crowding out 'bad investment', which is of course riskier lending to people with less money.
Think about student debt from this perspective: it has a normal interest rate (which exist to cover the risks of nonpayment) and the power of the government compelling people to repay it. Extremely low interest rates (< 1%) or able to be dismissed via bankruptcy - pick one! Either one is equally moral.
"The 2008 crisis was triggered by rising default rates on U.S. subprime mortgages. " No it was not. It was triggered by rising fed rates, which drove employment down, which destroyed home building (which is a job that people do for employment), and people who have lost their income cannot pay for houses.
The outcome as described afterwards is correct; however, instead of thinking of lending and a giant fall as the fault of banks, how about imagining that everyone should be saved? home owners, banks, everyone!
Declaring that banks, which exist to give out loans as the fault in this is also a moral call! They do things that are actually immoral - redlining, credit card companies with rates 200X of the prime rate regardless of credit history, sorting payments to create overdrafts, payday loans with interest rates that are well outside risk profiles - those should be regulated and perhaps erased. But lending people money to buy houses is not one of their crimes.
posted by The_Vegetables at 10:56 AM on March 3, 2020 [2 favorites]
I think this is the biggest issue. Paying back debt (if you are lower class, and this is through marketing, religion, and peer pressure) is the most important thing in the world, up to and including jail time or death. It's a moral issue, with your soul on the line, not a business decision.
This morality goes farther with people wishing for things like economic crashes to wipe out those with high debt loads to begging for higher interest rates, with the low quality logic of both giving people who already have lots of money higher returns and crowding out 'bad investment', which is of course riskier lending to people with less money.
Think about student debt from this perspective: it has a normal interest rate (which exist to cover the risks of nonpayment) and the power of the government compelling people to repay it. Extremely low interest rates (< 1%) or able to be dismissed via bankruptcy - pick one! Either one is equally moral.
"The 2008 crisis was triggered by rising default rates on U.S. subprime mortgages. " No it was not. It was triggered by rising fed rates, which drove employment down, which destroyed home building (which is a job that people do for employment), and people who have lost their income cannot pay for houses.
The outcome as described afterwards is correct; however, instead of thinking of lending and a giant fall as the fault of banks, how about imagining that everyone should be saved? home owners, banks, everyone!
Declaring that banks, which exist to give out loans as the fault in this is also a moral call! They do things that are actually immoral - redlining, credit card companies with rates 200X of the prime rate regardless of credit history, sorting payments to create overdrafts, payday loans with interest rates that are well outside risk profiles - those should be regulated and perhaps erased. But lending people money to buy houses is not one of their crimes.
posted by The_Vegetables at 10:56 AM on March 3, 2020 [2 favorites]
"No Moral Problem" ignores the foundational problem of:
"Who has the money to lend in the first place, and where did that money come from".
THAT is the source moral issue.
posted by symbioid at 2:30 PM on March 4, 2020 [3 favorites]
"Who has the money to lend in the first place, and where did that money come from".
THAT is the source moral issue.
posted by symbioid at 2:30 PM on March 4, 2020 [3 favorites]
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like this illustrates how china might be considered the world's foremost practitioner of modern monetary theory, which many view critically, but also enviously...
posted by kliuless at 10:43 AM on March 2, 2020 [2 favorites]