4 ms·
This ruling can't stand. It would crush the economy. You can't just wipe out $1.5 trillion in debt without consequence. That is about 7% of our GDP, or 1/3 of
by burfog 7y ago
This ruling can't stand. It would crush the economy.
You can't just wipe out $1.5 trillion in debt without consequence. That is about 7% of our GDP, or 1/3 of our federal budget.
Drastic and desperate measures would be required to stabilize the economy. We would need to get about $10,000 in tax from every family for the bailout and probably to avoid hyperinflation.
As of now, the economic devastation is limited only by the slowness of our soon-to-be-clogged bankruptcy courts and by the feeling some people have that bankruptcy is immoral.
- chrisseaton 7y ago> only by the slowness of our soon-to-be-clogged bankruptcy courts and by the feeling some people have that bankruptcy is immoral Doesn't bankruptcy also have long-lasting effects on your credit and other factors? I'm often asked in applications for all sorts of things if I've ever been bankrupt. I'm not sure what they do if you answer yes but I bet it's not great.
- david927 7y agoMy understanding is that it lowers your credit score for a few years. Not ideal but not formidable either.
- david927 7y ago>This ruling can't stand. It would crush the economy. Law doesn't work that way.
- vanniv 7y agoIt actually does -- y'see Congress gets to make the laws, and if judges decide the laws mean really destructive things, Congress writes new laws.
- david927 7y agoDestructive to the organization making money off of the interest is not destructive "in general". If you make a loan, it comes with risk. End of story.
- vanniv 7y agoThe thread I was replying to started with the claim that this law couldn't stand because it would utterly destroy the economy. The response was that "law doesn't work that way" If it is true that this judge's ruling implies the destruction of the economy (which is a claim whose truth value I am not offering an opinion here), then it is the case that Congress' powers exist specifically for the purpose of making "law work that way" -- that is, changing the law when it is discovered that the law is destructive
- david927 7y agoThe law would be destructive only to the half who foolishly lent money. To the half who foolishly took it, it would be tremendously constructive. 50/50. The law shouldn't favor just one side, by definition.
- burfog 7y agoIt is destructive "in general" when the amount is a significant portion of GDP, federal budget, or total national assets. This qualifies. This is like the sub-prime mortgage meltdown with the credit default swaps. This is like the automotive industry troubles that led to cash-for-clunkers, GM earning the moniker "Government Motors", Chrysler being sold to Fiat, and tax refunds for buying new cars. This is like the time back in the 1980s when we bailed out the savings-and-loan companies.
- david927 7y agoI disagree. For each loan, you have both sides. So if one side suffers, it doesn't qualify but if the other side suffer is does qualify? Also, you can't gain from the interest, make all that money, and then expect the law to protect you from this risk side of the "risk/return" ratio because "too many" are in the same boat.
- nickthemagicman 7y agoTaxpayers wiped out the debt of big Banks to the tune of 16 trillion... The economies fine. Giving 1.5 trillion to the middle class instead of corporations might even improve the economy!
- 3fe9a03ccd14ca5 7y agoGiving? Who is giving?
- nickthemagicman 7y agoThe 1% has 50 trillion or more in wealth so them.
- mcv 7y agoThis ruling is not wiping out all student loan debt, it's wiping out one person's debt based on extremely stringent rules. He has lived most of his life under crushing debt, worked his ass off trying to pay it back, and instead the debt only grew. It is obviously not a sustainable debt, and given that, bankruptcy is the only way out. But the only way all student loan debts are going to be wiped out based on this ruling, is if they are all proven to be unsustainable, in which case indeed they should be wiped out.