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> For example Margin Debt is at $800 billion... Retail traders' margin debt is secured. However I agree the mechanics of margin debt has the ability to inflict

> For example Margin Debt is at $800 billion... Retail traders' margin debt is secured. However I agree the mechanics of margin debt has the ability to inflict colossal pain on normal people. > let people take responsibility for their own actions... The government already lost the money. The borrowers are already in default. They are never going to pay this money back. To put in perspective: "Only 43% of public two-year college students, and 34% of for-profit college students who entered repayment on their loans in 2011 had paid even a dollar toward their loan principal after five years." (https://elizabethwarren.com/plans/student-loan-debt-day-one https://elizabethwarren.com/plans/student-loan-debt-day-one) Is that relief? No. Is it stimulus? No. The lent money was spent long ago. You're not giving money to borrowers who are already in default. You are taking a number in a government spreadsheet, and making it smaller. If you're going to do this fauxconomics dystoplican point of view, don't warble garbage about civilization and responsibility. Focus on the mechanics of what is actually happening. Indeed, I would agree bailing people out from margin calls would significantly reduce harms, but on the other hand, that's totally politically untenable, and also actually expensive. Whereas forgiving debt that is already in default costs nothing.

endisneigh 6y ago
You make some good points. However, my rebuttal is that the colleges referenced in the article were for-profit and unaccredited to begin with. In other words, the students of said schools willingly went to schools without any level of vetting (or they were vetted and failed). Given this there are two questions: 1. Did the school commit a crime? If so, there's no need to forgive the debt - the government and/or students should go after the school, and our existing legal process makes things right. 2. Were the students harmed? This is obviously more difficult to prove in general. Let's suppose the students were harmed (since the article doesn't really specify what it means by harm). Should the government continue to subsidize people who are harmed in this way? My take is if we want to reduce harm, why not just forgive all debt? Clearly if all debt is forgiven, then all harm caused by such debt is reduced to zero. As a society we have already decided people should be responsible for some things, so the question is why specifically in these circumstances are they being forgiven? And how is the government going to create the circumstances where they don't have to do this again?
- dragonwriter 6y ago
  > However, my rebuttal is that the colleges referenced in the article were for-profit and unaccredited to begin with False. The two institutions that together account for the majority of students at issue here were ITT Tech (now defunct, but was nationally accredited) and Corinthian Colleges, Inc. (also now defunct, but many of their constituent institutions were nationally or regionally accredited.) Nonaccredited schools aren't qualified for the federal student loans being forgiven here. > Did the school commit a crime? That's a weird standard. Why would it need to be a crime rather than a tort? > so, there's no need to forgive the debt - the government and/or students should go after the school, and our existing legal process makes things right. Er, the majority of the students affected are from institutions that no longer exist, largely because of their frauds. There is no one to go after.
  - endisneigh 6y ago
    Ah, I see what has happened. You're correct, however I believe ACICS, who accredited both (or a least some of the institutions) was later found to be a poor accreditor by the DoE and was stripped of its ability. Nonetheless, your point is that at the time they were both accredited and those were able to get the federal student loans. I stand corrected.
D13Fd 6y ago
Your premise is wrong. Forgiving debt already in default absolutely costs something. It's not like the debt goes away when a borrower defaults. When they eventually get a job, they will still have to pay—unless we forgive the debt. Forgiving the debt drives up tuition costs even further by changing the risk calculation for borrowers, making more borrowers willing to borrow ridiculous amounts and therefore increasing the amount of money available to schools. Beyond that, forgiving the debt punishes all of those students who worked hard and sacrificed to pay off their debt, and rewards those who didn't. This is a grossly unfair policy.

endisneigh 6y ago

You make some good points. However, my rebuttal is that the colleges referenced in the article were for-profit and unaccredited to begin with. In other words, the students of said schools willingly went to schools without any level of vetting (or they were vetted and failed). Given this there are two questions: 1. Did the school commit a crime? If so, there's no need to forgive the debt - the government and/or students should go after the school, and our existing legal process makes things right. 2. Were the students harmed? This is obviously more difficult to prove in general. Let's suppose the students were harmed (since the article doesn't really specify what it means by harm). Should the government continue to subsidize people who are harmed in this way? My take is if we want to reduce harm, why not just forgive all debt? Clearly if all debt is forgiven, then all harm caused by such debt is reduced to zero. As a society we have already decided people should be responsible for some things, so the question is why specifically in these circumstances are they being forgiven? And how is the government going to create the circumstances where they don't have to do this again?

dragonwriter 6y ago
> However, my rebuttal is that the colleges referenced in the article were for-profit and unaccredited to begin with False. The two institutions that together account for the majority of students at issue here were ITT Tech (now defunct, but was nationally accredited) and Corinthian Colleges, Inc. (also now defunct, but many of their constituent institutions were nationally or regionally accredited.) Nonaccredited schools aren't qualified for the federal student loans being forgiven here. > Did the school commit a crime? That's a weird standard. Why would it need to be a crime rather than a tort? > so, there's no need to forgive the debt - the government and/or students should go after the school, and our existing legal process makes things right. Er, the majority of the students affected are from institutions that no longer exist, largely because of their frauds. There is no one to go after.
- endisneigh 6y ago
  Ah, I see what has happened. You're correct, however I believe ACICS, who accredited both (or a least some of the institutions) was later found to be a poor accreditor by the DoE and was stripped of its ability. Nonetheless, your point is that at the time they were both accredited and those were able to get the federal student loans. I stand corrected.

D13Fd 6y ago

Your premise is wrong. Forgiving debt already in default absolutely costs something. It's not like the debt goes away when a borrower defaults. When they eventually get a job, they will still have to pay—unless we forgive the debt. Forgiving the debt drives up tuition costs even further by changing the risk calculation for borrowers, making more borrowers willing to borrow ridiculous amounts and therefore increasing the amount of money available to schools. Beyond that, forgiving the debt punishes all of those students who worked hard and sacrificed to pay off their debt, and rewards those who didn't. This is a grossly unfair policy.