3 ms·

That one is much simpler though, it's just a closed loop of people owing each other. The interesting part is that it seems the motel owner was aware that the l

by ric2b 5y ago

That one is much simpler though, it's just a closed loop of people owing each other. The interesting part is that it seems the motel owner was aware that the loop existed and would end up back with him, otherwise he would've been caught stealing from the tourist. If he already knew this he would be able to get people together and agree to cancel all the debts, with no need for the external $100 to show up.

kemotep 5y ago
Getting everyone in a small community to agree to cancel all debts would be like a biblical Jubilee[0]. So it is not too far-fetched of an idea to have happen. [0]: https://en.wikipedia.org/wiki/Jubilee_(biblical)?wprov=sfti1 https://en.wikipedia.org/wiki/Jubilee_(biblical)?wprov=sfti1
- Mvandenbergh 5y ago
  In an economy which was only weakly monetised and where it would be rare to have debt tenures of more than one growing season, debt jubilees are minimally disruptive. Imagine getting a mortgage in those conditions.
  - freeopinion 5y ago
    Immediately following a Biblical Jubilee, a 30 year mortgage is perfectly manageable. 10 years later it is still manageable. 10 more years later, and you might want to cap it at a 25-year mortgage. 10 more years later and new mortgages don't go much past 15 years. Then there's a space of 5+ years that people can only get 10-year mortgages. Then no mortgages for 10 years. Then we jubilee and everything busts open again. I think it would be very hard to predict all the side effects of such a controlled cycle. It's easy to predict some of the effects. But I wouldn't have any confidence in any model that purported to tally it all up without actually living though several cycles in real life.
    - names_are_hard 5y ago
      This isn't strictly related to the biblical jubilee (wherein land ownership is reset every 50 years), but they also had debt cancelation every seven years (Deuteronomy 15). The Bible warns followers that they must not avoid lending as the seventh year approaches, calling this a sin. Well that didn't work out too well, and at some point (end of the second temple Era, about two millenia ago) the rabbinic leadership led by Hillel invented a legal loophole to work around the law without explicitly overturning it, allowing debts to persist past the sabbatical year. To read more, search the web for "prozbol" (פרוזבול). Anyway the takeaway is that good intentions aren't always enough, you have to think through the second order effects of the laws you create. The sabbatical year law was presumably invented to protect the poor, in effect it discouraged lending and helped no one.
- dllthomas 5y ago
  It's much easier than a biblical jubilee, because all the debts cancel, so everyone gains the certainty of not having to worry about failed repayment and people only lose in proportion to their intent to default. That is probably a win for most people, and also those individuals for whom it's not a win probably have some trouble admitting that.

by ric2b 5y ago

kemotep 5y ago

Getting everyone in a small community to agree to cancel all debts would be like a biblical Jubilee[0]. So it is not too far-fetched of an idea to have happen. [0]: https://en.wikipedia.org/wiki/Jubilee_(biblical)?wprov=sfti1 https://en.wikipedia.org/wiki/Jubilee_(biblical)?wprov=sfti1

Mvandenbergh 5y ago
In an economy which was only weakly monetised and where it would be rare to have debt tenures of more than one growing season, debt jubilees are minimally disruptive. Imagine getting a mortgage in those conditions.
- freeopinion 5y ago
  Immediately following a Biblical Jubilee, a 30 year mortgage is perfectly manageable. 10 years later it is still manageable. 10 more years later, and you might want to cap it at a 25-year mortgage. 10 more years later and new mortgages don't go much past 15 years. Then there's a space of 5+ years that people can only get 10-year mortgages. Then no mortgages for 10 years. Then we jubilee and everything busts open again. I think it would be very hard to predict all the side effects of such a controlled cycle. It's easy to predict some of the effects. But I wouldn't have any confidence in any model that purported to tally it all up without actually living though several cycles in real life.
  - names_are_hard 5y ago
    This isn't strictly related to the biblical jubilee (wherein land ownership is reset every 50 years), but they also had debt cancelation every seven years (Deuteronomy 15). The Bible warns followers that they must not avoid lending as the seventh year approaches, calling this a sin. Well that didn't work out too well, and at some point (end of the second temple Era, about two millenia ago) the rabbinic leadership led by Hillel invented a legal loophole to work around the law without explicitly overturning it, allowing debts to persist past the sabbatical year. To read more, search the web for "prozbol" (פרוזבול). Anyway the takeaway is that good intentions aren't always enough, you have to think through the second order effects of the laws you create. The sabbatical year law was presumably invented to protect the poor, in effect it discouraged lending and helped no one.
dllthomas 5y ago
It's much easier than a biblical jubilee, because all the debts cancel, so everyone gains the certainty of not having to worry about failed repayment and people only lose in proportion to their intent to default. That is probably a win for most people, and also those individuals for whom it's not a win probably have some trouble admitting that.