Josh wrote:Fidelio wrote:A lot of people if they know debt forgiveness is coming will work up huge debts to maximize benefits for themselves.
It’s up to lenders, then, to avoid lending to people who don’t plan to repay.
Ah-ha. These statements are the crux of the problem.
i was trying to address this on Page 1, but, it may be impossible to imagine a world without unsecured, unearned credit,
and, a world in which banks are responsible gatekeepers of lending.
At some awful point, probably with banking actuaries, banks realized the great profit potential for them with easily-attained high interest credit cards, and other loans. Certainly, there is risk, loss, etc., but, their OVERALL profit margin is great. If not, our mailboxes would not have multiple offers of credit every month of every year.
Loan sharks are not new. The scale increased exponentially, 1960’s-ish. Esp via credit cards.
The FIRST credit cards were as difficult to get as traditional bank loans. Accountability.
i was shocked in the 1990’s to learn high schoolers receive offers of credit cards.
My granddaughter, in 2009, received her FIRST mailed credit card offer at age 2.
The idea of people acquiring credit without ever having a job, still shocks me.
Ignorant people interpret it as: FREE STUFF.
This needs to be taught for what it is: Signing up for indentured servanthood.
Guaranteed student loans are a big problem.
Banks FREELY loan money knowing they can’t lose. Why not?? Bankruptcy protection is not possible.
They do not care that education debt may be carried for life.
Again, this is preying on young people with no experience in how tough it is to repay debt.
They recite numbers that are beyond their ability to comprehend. “This phone is only $1000!”
Until a person has REPAID $1000, they have no perspective on what that number represents.
With the deeply embedded mentality of, “BUY NOW, PAY LATER,” no effort at effective solution is possible. Any effort is very likely to simply then be used as
leverage - FOR NEW DEBT.
(See Fidelio’s post.) i have witnessed this in my own family. It’s heartbreaking.
There are 2 players that cannot continue as they have:
1. Banks TEMPTING egregious debt, making it so attractive and easy, it’s hard to avoid;
2. Bank customers, allowing themselves to be tempted, without basic economic education, without adequate self control that could be gained with better education.
Madison Avenue knows how to advertise!
Sitting between ignorance and Madison Avenue, the outcome can be no surprise.
Without serious changes, present chatter of gov-centered debt forgiveness is another bandaid, and waste of time. They aren’t even sincere about wanting to improve anything. (i honestly suspect) they just want to wipe the slate, to open up avenues for more and new debt.
Lenders LOVE when new customers arrive, debt-free. It’s their opportunity to sell-new-loans.
Here’s a clue: BANKS HATE CASH CUSTOMERS.
Whether houses, cars, etc., they want you to have a loan. Your debt is their bread+butter.
Dr Wojo:
.. Currently many enlisted folk are getting a ‘free’ GI - Bill education where the only thing the fat-cat colleges are receiving out of it is a tax write-off. How would such forgiveness differ? ..
My understanding is, GI BILL ED is not free, it’s FIRST earned through military service.
The opposite of “Buy now, pay later.”
There are similar ideas out there about civil service or community service - to earn college education.
i’m not sure why this has never “taken off.” (There is expense to running programs.)
From what i understand, it’s a responsible, common sense approach. The concept isn’t new, it was implemented during The Great Depression. In his early days, obama spoke of it, nothing happened. (There may be some active work programs, i’m unsure.)
With today’s effort at requiring
able bodied welfare/food stamp recipients to work, maybe more is ahead.
People value what they are personally invested in.
Work is healthy. It is a privilege, not a punishment.
