I'm using "deadbeat" to refer to people who don't pay back their loans. That's both the literal dictionary use of the term and also a common term in the industr

I'm using "deadbeat" to refer to people who don't pay back their loans. That's both the literal dictionary use of the term and also a common term in the industry. Why do you consider it "inflammatory"? Dang, I understand that you get a lot of flags whenever I point out unpleasant facts. I'm sorry if this bothers you. Should I just accept that HN is no longer a place where uncomfortable realities can be discussed, and move on? If there are "deadbeats" being subsidized they would obviously not all be of one flavor. They are disproportionately and predictably of one flavor. That's the entire reason this is a non-simple issue. Let me take numbers from 7 of this paper: https://drive.google.com/file/d/0B-wQVEjH9yuhanpyQjUwQS1JOTQ/view https://drive.google.com/file/d/0B-wQVEjH9yuhanpyQjUwQS1JOTQ... Based on eyeballing the graph, consider a group which is 50% black and 50% Asian. Every person has a 600 FICO score. Blacks with a 600 FICO score have about a 40% default rate while Asians have about a 20% default rate. To lend $100 to each member of this group at a fixed interest rate (i.e. we ignore race) and break even we need to charge a 43% interest rate to the mixed group. The average Asian will pay back $114.40, while the average black will pay back $85.8. Defaulters come in both flavors - in a group of 100 blacks and 100 Asians, there are 20 Asian defaulters and 40 black defaulters. So the 80 Asians who are not defaulters (using a more awkward word since you object to "deadbeat") are paying higher interest rates to make up for predictable losses caused by the 40 black defaulters. If we did not bar the use of racial information then we'd charge blacks a 66% interest rate and Asians a 25% interest rate. This would be statistically unbiased (i.e. it removes omitted variable bias https://en.wikipedia.org/wiki/Omitted-variable_bias https://en.wikipedia.org/wiki/Omitted-variable_bias ) and would not result in a predictable transfer of wealth from Asians to blacks. Individually this does seem unfair. I am expressing no opinion on which policy is better. I'm pointing out that whatever we do will be in some sense unfair. The only position I'm pushing is numeracy and clear thinking that acknowledges the very real tradeoffs. (To discuss examples in the article, one could repeat using similar calculations with ad delivery or recidivism. I just go with lending because it's mathematically equivalent and there's lots of published work on it that I can cite.)