15 ms·

The People's Bailout

219 points by dorkitude 14y ago

cjdrake 14y ago
When did HN become reddit /r/politics?
- saraid216 14y ago
  Last Tuesday.
pooyak 14y ago
How does buying debt from creditors work? Would something like this actually cause buying debt more expensive and thus benefit creditors instead?
- Volpe 14y ago
  Not really, because it could just set a metric on how cheap debt is before it purchases (i.e the 30:1 return they mentioned). In the end creditors want to get rid of risk, so if someone isn't paying the loan, getting 1/30th of that money is better than 0. I don't see how this could create a competitive (and thus drive prices up) situation.
  - ISL 14y ago
    If I understand things correctly, it may drive borrowing costs down by lowering the lender's risk exposure. (If you loan money to someone, and they don't pay you back, with this program there's a tiny chance that OWS will, lowering your risk. Curious to see OWS bailing out bankers as well as debtors.)
- scrumper 14y ago
  Generally, any time there is more demand for something the will increase. OWS entering the market for certain kinds of distressed debt would be expected to increase the price of that debt - the group of buyers in the market has increased by one, so there is more competition for the asset. There is absolutely nothing wrong with this at all. The creditors are simply selling the debt to try and recover something from their original loan; getting more back than the would have a week ago is great. It doesn't matter to them whether the buyer is going to forgive the debt or collect it with men in leather jackets and hammers; they've sold, they've got back a few cents on the dollar and it's not their problem anymore. How does it work? The debt is an asset belonging to the original creditor. To use the $14,000 example in David Rees's post, creditor XYZ made a loan to debtor ABC for, say, $10,000 a few years ago. They made that loan expecting to receive $14,000 back over time - that's why they did it. Now, ABC looks unable to repay the debt. The obligation still exists, but it's no longer practical or profitable for XYZ to try and recover it. XYZ has no men with hammers, no provision for accounting for irregular payments or special arrangements and no real interest in hanging on to this now-useless asset. Luckily for them, there are other companies which do want that asset, but because of the difficulties in collecting on it they're not willing to pay a lot. $500, in this case. It's worth spending $500 with the hope of collecting $14,000; if you spend $500 enough times then you'll eventually get back a few $14,000s and now you have a business. The price reflects the probability of getting that money back. In this case, very, very unlikely indeed, and if something's that cheap on Wall Street then you can be sure nobody wants it. So that debt is bought and sold like anything else, according to the business needs of the various people involved. Your old neighbour's beaten old '68 Mustang might have been a piece of junk to him - it was too rusty to pass inspection - so he sold it for a few thousand, happy to get rid of a problem. To a specialist in vintage Fords, though, that car is worth a lot after they put the work in. In this case there is an opportunity for a body with a bit of spare cash to benefit individual debtors by forgiving their loans, while helping creditors stay in business - and their employees feed their families - by buying their crappy assets at market rates. They are adding both charity and liquidity to a gummed-up market with very real people suffering in it.
  - malandrew 14y ago
    Question: If OWS does this often enough to the point it becomes expected by debtors (i.e. "I won't pay because maybe I'll win in the OWS debt lottery"), wouldn't that in effect reduce the number of people that would actually pay back the $14k? And assuming it does have a global effect that should depress the market value of distressed debts further, right? How can OWS depress the probability that creditors will get their money back enough so that the cost of buying debt becomes cheaper?
    - pmorici 14y ago
      At the point that OWS is buying the debt it has likely already effected the individuals credit record and score which would make it much more difficult for the person to get additional credit for some number of years.
    - scrumper 14y ago
      Moral hazard for private debtors, in effect? It's interesting, but OWS would need to be buying a LOT of debt for it to have an effect. It's also quite a bad trade from the point of view of the debtor: if OWS doesn't buy their particular obligation, they are in a world of trouble.
  - washedup 14y ago
    True, nothing wrong with this, but a repercussion would be increasing interest rates, which would undoubtedly drive some debtors to default on their loans.
    - scrumper 14y ago
      How so? Making the creditor's loan pool more profitable (by increasing the resale price of defaulted debt) reduces their overall risk, which leads to either more loans being made or a reduction in rates.
abdurraheem 14y ago
someone should write a guide on how to buy up your own debt for 1/30th of the cost
- marklabedz 14y ago
  At a very basic level, convince the credit card company (or hospital, bank, etc), that they will never collect even a penny from you and incur the hit to your credit rating that such activity entails. To actually purchase the debt, you'll likely need to be licensed according to your local jurisdiction.
- canadiancreed 14y ago
  Indeed. I know that if I can buy a dollar of debt that I owe for a nickel, I want in on that. It'd make things a lot easier on my pocketbook.
  - malandrew 14y ago
    More interestingly, how would the 1099-C work in such a case. Wouldn't it be like matter and anti-matter colliding wiping each other out since you would simultaneously incur a tax-deductable loss and a taxable gain of equal value?
    - patio11 14y ago
      sigh No. If you buy $10k of debt for $500, the debt buying business' basis in the debt is $500. If they cancel it, they can deduct $500. If $10k of your debt is forgiven, you get 1099-C'ed for $10k in income. Net-net, this would cause $9.5k in income if you went through with it.
      - Firehed 14y ago
        Still, taxes on $9500 are way lower than the $10000 you originally owed, so it sounds like a win. Until everyone starts doing this and the whole system collapses, at least. That money isn't coming from thin air.
loudin 14y ago
So, what would prevent me from going into a massive amount of debt, not repaying it, and asking everyone else to foot my bill? This seems like OWS is saying, "Well, corporations got greedy and were bailed out. Now it's the people's time to do the same thing." Why is something, when supported by a corporation, immoral when the same thing, supported by "the people", is righteous? This seems like it's just encouraging bad behavior all around. Debtors get some money, people in debt get a massive discount, and people who play by the rules are even more at a disadvantage. We need to restore trust in the system by educating people and holding corporations accountable for fraud - not by undermining the loan system. This move by OWS sickens me.
- gmkoliver 14y ago
  You make it sound as if people who play by the rules can't have distressed debt. Is that what you mean?
- perfectm 14y ago
  It's called bankruptcy. 7 years of never being able to have credit.
  - rosser 14y ago
    Are you kidding? They hand out credit cards like candy to the recently bankrupt.
    - malandrew 14y ago
      TBH that's the problem of the companies handing out the credit cards. Companies that do that are making a business decision. You and I need not worry about their business model because they have their own spreadsheets with assumptions of how many people will not pay.
    - RyJones 14y ago
      This was my experience (by proxy, my aunt went bankrupt and the day it was final, bought a new car and had tons of credit card offers). They do this because they know you can't go bankrupt again for quite a while, so you're on the hook the second time.
cypherpunks01 14y ago
This is a pretty interesting idea, economically speaking. Does anyone know what is necessary in order to become a debt broker? Being able to buy your own debt (by proxy) for pennies on the dollar might have pretty broad implications.
- HeyLaughingBoy 14y ago
  I think you just need to get a debt collector's license and that's not difficult. I'd ask my wife (used to be a collector), but she's asleep ATM. We did discuss starting a collection business years ago so I could learn the business and write software for it (apparently the tools they use are a royal pain), but she wasn't interested in getting back in the field and I lost interest. Bear in mind, though that to buy debt at pennies on the dollar, the debt is going to be very old (5+ years old at least probably) and the seller is only selling it because they're convinced they will never be able to collect. You're also looking at buying large blocks of it.
  - patio11 14y ago
    You dodged a bullet. It is soul-crushing work. Your mission, should you choose to accept it: you buy $10,000 of, say, phone bill receivables, with the average in the $250 range, for $500 from the debt collection company which previously worked them for a year and got nothing. You use a commercial database and are able to identify phone numbers for half of the debtor. The "fun" now begins. You begin getting told that the debtor is deceased, told that the debtor ran out on her three years ago, told that the debtor owes $300,000 due to uninsured medical expenses, told that the debtor did not authorize the debt and that was in fact his ex-wife's cell phone, told that the debtor has to choose between paying for Christmas and paying this bill, etc etc etc. This is of the 10% of debtors who will speak to you and not just curse loudly into the telephone. Some of those debtors are actually telling the truth, by the way.
  - malandrew 14y ago
    How large is "large"?
heyrhett 14y ago
The problem that I see with this is that once your debt is sent to collections, that mark is already on your credit report for 7 years, even if you pay off the debt. So, "forgiving" the debt is pretty meaningless. People still have their credit report tarnished, which leads to higher interest rates, higher car insurance, and is basically another way to oppress people who are already poor. The only advantage to the debtors in this case is that they won't get phone calls from collection agencies. It's a nice idea though.
- HeyLaughingBoy 14y ago
  Seven years goes by in the blink of an eye once you're old enough ;-) Forgiving the debt is not meaningless: it's a big chunk of money you don't have to pay off. Granted, it's better to work with the creditor and get them to settle for a smaller amount, but a $15k debt removed from your record is not likely to cause you $15k of increased expenses over 7 years.
  - malandrew 14y ago
    I'm actually interested in knowing if I bought the debt of someone else, could I write whatever I wanted on their credit report? For example, could I purchase $15k worth of debt for $500 and then forgive the debt and report to the credit agency that it was paid in full?
    - heyrhett 14y ago
      You can't erase the statement that the debt was 180+ days late and sent to collections. The original debt holder could erase that statement, but they have absolutely no incentive to, since they took a 97% loss on your debt. A single late payment like that will probably drop your FICO score 150-200 points.
      - toomuchtodo 14y ago
        Not true. I walked away from my primary residence because it lost over $100K in value. My credit score only dropped from ~705 to 655 (per Creditkarma.com). Also, only one of my creditors lowered my credit limit (Citibank). American Express didn't even blink, and I've got a Platinum card with them with a $75K+ limit. To date, I've missed over 22 payments on my mortgage, and my credit score still remains fairly usable (I may complete a short sale, or may let it forclose. Depends on how amiable the noteholder is to both scenarios). You've been lied to. The risks of walking away from most debt is highly overrated.
gmkoliver 14y ago
Does anyone have a number for the size of the consumer distressed debt market? Not getting much luck searching so far.
marknutter 14y ago
How does OWS think this debt accumulated? Debt isn't some random accident like getting hit by a car while crossing the street. You have to get yourself into debt. It used to be taboo, but it's acceptable to get into debt these days and worse yet, walk away from it. OWS, to me, represents an entitled generation.
- gmkoliver 14y ago
  Debt isn't some random accident like getting hit by a car while crossing the street. No, but distressed debt can be.
- narcissus 14y ago
  "Debt isn't some random accident like getting hit by a car while crossing the street." Except debt can be exactly due to some random accident like getting hit by a car while crossing the street and you don't have the insurance to pay for the medical bills. I'm not saying that this is true for all of the OWS debts: probably not even the majority. I'm just saying that it's not as easy as "it's your fault you're in debt".
  - tsotha 14y ago
    >Except debt can be exactly due to some random accident like getting hit by a car while crossing the street and you don't have the insurance to pay for the medical bills. That's why we have bankruptcy laws. From what I heard at the time, the big hobby horse for the OWS people was student debt, which can't be forgiven in bankruptcy. And that kind of debt is entirely optional.
    - sc68cal 14y ago
      That's why we have bankruptcy laws. Yes - bankruptcy laws that were passed in 2005 which made it significantly harder to get debt forgiven in bankruptcy, and also removed some forms of debt from being able to be discharged in bankruptcy: https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_and_Consumer_Protection_Act https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_an... It was widely claimed by advocates of BAPCPA that its passage would reduce losses to creditors such as credit card companies, and that those creditors would then pass on the savings to other borrowers in the form of lower interest rates. These claims turned out to be false. After BAPCPA passed, although credit card company losses decreased, prices charged to customers increased, and credit card company profits soared. http://ssrn.com/abstract=1157158 http://ssrn.com/abstract=1157158 And that kind of debt is entirely optional. Not when the majority of jobs that create a vibrant middle class in the post-industrial United States require at least a college degree.
patio11 14y ago
For the benefit of folks who might not understand how debt collection works, which may include OWS: if you buy $10,000 of an individual's debt for $500 and then forgive the debt, they have just incurred income of $10,000 and are obligated to pay taxes on it exactly as if you had handed them $10,000 in cash for services rendered. If you don't inform the IRS that you forgave the debt, via a 1099-C, you're going to get wrist-slapped mightily if they think it is an honest mistake or, if you're, say, doing it as a political statement, you will be afforded the opportunity to make your political statement in front of a judge hearing your case for criminal tax evasion. This is not accounting advice, by the way. There's some wrinkles if the debt was caused by your principal residence, due to some of the recovery measures passed two years ago. If its, say, CC or medical debt, though...
- heyrhett 14y ago
  Good point, patio11. If debtors don't pay back their debt after after a certain time period, they are supposed to report it as income, but I doubt very many do. Setting up an organization like this puts the onus on the organization to file the 1099-C's
  - lifeguard 14y ago
    Unpaid interest owed on debt would never be income.
- malandrew 14y ago
  Couldn't OWS just hold it forever and not do anything with it? i.e. "Look I bought your debt, you don't have to pay me a penny for it ever, but I can't officially forgive you since to do so would subject you an income tax obligation. Just don't worry about it ever again and get on with your life."
  - patio11 14y ago
    Conspiracy to commit tax fraud.
aristus 14y ago
Careful; debt forgiveness can be treated as taxable income. The lucky winners may end up with a nasty unforgivable tax bill.
washedup 14y ago
Won't a result of this be an increase in the "cost" of debt, and hence interest rates on variable loans would raise for everyone else while other's are being paid off? Seems bad..
- wavesounds 14y ago
  No by buying bad debt that nobody wants to buy you are adding liquidity to the market, its a win win for everyone involved.
rdl 14y ago
It would be cool if someone created something like prosper, where I could see bad debt from people, and they could make pitches for why I should extinguish theirs. For $x, I could purchase and extinguish N x $x in debt, where N is some function of type, time to maturity, etc. I personally would be more likely to buy deserving-seeming medical, failed business, etc. debt than car notes or whatever, but maybe others would have their own preferences.
- abofh 14y ago
  As a former prosper lender - that's basically what it is.
- fr0sty 14y ago
  So people list their bad debts on a website and compete for the most compelling sob story to get them written off. I actually cannot imagine how this would lead to better outsomes than just buying and forgiving debt blindly. You would preference the best and boldest liars over people who can't bring themselves to debase themselves in front of the world in hopes of your patronage. Buying blind at least solves the adverse selection problem.
  - lizzard 14y ago
    I would not mind buying and forgiving someone's debt blindly. I've been in situations where $2000 debt destroyed my ability to survive independently. While now I could pay off 2K instantly without even feeling it. How lovely it would be to relieve someone of that burden!
- pmorici 14y ago
  When you invest in debt via peer to per lenders like Prosper and Lending Club you aren't actually buying the persons debt you are purchasing a registered security from the respective p2p company who is the actual holder of the debt. The security is structured in such a way that only the p2p company has the right to collect on the debt should the debtor default.
  - 14y ago
brianbreslin 14y ago
This is awesome beyond words.
patrickgzill 14y ago
What if the person contests the debt in some way, but OWS buys it and forgives it anyway? Would the IRS agree that contested debt should be treated differently come tax time?
JumpCrisscross 14y ago
This is a curious activity - non-performing debt, i.e. notes not generating any cash for the holder and thus not extracting any cash from the ower, are being exchanged at market value, thus transferring cash via an intermediary (OWS) from a donor to the lender. This results in a non-cash accounting change for the ower and a boon for the lender. Economic activity is boosted if the lender's investment/consumption is more sensible than the donor's - ower does not figure into the algebra. This is likely to be stimulative if the lender's marginal propensity to save excluding risk investing is low. If these are performing loans, on the other hand, the donor is, via OWS, acting as a market maker for the lender, providing them with liquidity/immediacy while granting the ower cash flow. This is like a stimulus payment to the ower (provided they consume the extra cash flow or invest it in risk assets). It's also a bail-out to the lender. This is structurally identical to the Federal Reserve buying banks' assets, e.g. loans, and Washington increasing high-velocity fiscal spending. OWS's plan has the downside of being market distorting (via moral hazard) while the prior is less so (Fed's buying activity can be distorting if not done properly or if amped up to supplement Congressional inaction). I came here expecting to chastise this but, economically speaking, it's a better use of surplus savings than having them sit idly in the money markets. It is, though, worse than building things, funding research, or helping feed starving children. Kudos, still, for beating par (the money markets).
- intended 14y ago
  I strongly doubt the bonds/underlying is being sold at market value - I assume its similar to factoring (? I forget if thats the precise term) but these are likely Non Performing loans. The original debt would be sold at fractions of the original price by banks to a collection agency. From what I remember of economic theory, this is essentially a stimulus directed at those who have the hardest time dealing with debt. So on a simple superficial take - not bad at all, it seems even more targeted than a full stimulus to maintain all aspects of the economy. Edit: TO be clear - I agree with your final point. Essentially you are saying that if we invest in growth and growth increases, it would be the best way for people to get out of their quagmires. In that respect, such a debt forgiveness is linked with increasing growth from what I recall.
  - 14y ago
oscilloscope 14y ago
If this happens on a large scale, will it cause deflation? It seems like it would reduce the money supply.
- akamel 14y ago
  the debt was already downgraded from say 14k to 500$ so the loss was already taken; in relative terms an extra 500$ loss is meaningless.
bmccormack 14y ago
After OWS forgives random debt, is it also going to help teach people how to avoid debt again? By avoiding keeping a balance on credit cards? By saving up an emergency fund for a rainy day? By saving for retirement? A one-time forgiveness of debt is a generous gift to be received, but unless you have the habits to avoid debt again, it will just grow back again over time.
- potatolicious 14y ago
  http://www.washingtonpost.com/wp-srv/politics/documents/american_journal_of_medicine_09.pdf http://www.washingtonpost.com/wp-srv/politics/documents/amer... ~62% of all bankruptcies in the US have a direct medical cause. Credit card debt and debt from overconsumption is certainly a problem, but if 62% of the debt forgiven arises from unexpected medical bills, I'd call that some pretty good work. Though I'm somewhat uncomfortable with the everyman shouldering the fiscal brokenness of America's thoroughly inhumane and downright barbaric health care system.
  - greedo 14y ago
    Then set up a charity where people with medical bills can submit them and ask for some assistance. That way they stay out of debt/bankruptcy, have a cleaner credit report, and can focus on their health issues not financial issues.
    - potatolicious 14y ago
      So... universal health care then :P An organization that receives all your medical bills, keeps you out of debt/bankruptcy, and charges you an amount that it determines would not cause undue hardship? Like insurance, except everyone qualifies! Slight side note: this whole discussion is somewhat depressing, but I've come to expect this from HN lately. This whole thread is divided into two rough parts: people addressing legitimate questions about the legalities of this venture, and people clucking derisively at the stereotypical straw man of the poor. Whether it's sexism in tech, racism around the world, or the plight of the American poor re: medicine, there are always a ready army of the privileged ready to attack people for imaginary and insultingly intellectually lazy stereotypes.
joe_the_user 14y ago
The reason that any bank that sells debt would attempt to avoid this kind of thing happening should obvious. Moral hazard. If a debtor can refuse to pay and then only pay what the bank really then thinks the loan is worth (with few if any penalties), then every debtor is going to do that. Obviously, OWS is doing this as a political statement that the debt system in the US is corrupt, unjust or something. It does seem like things such as education shouldn't throw a kid into life-long debt from the get-go or the benefits should be more, uh, clear. The student loan system today generates a huge number of defaults. The contradictory situation where the banks naturally write down this debt but work hard to keep the written-down out of the hands of the debtors may be an Achilles heal of the system.
- zanny 14y ago
  > The student loan system today generates a huge number of defaults. Too bad you can't default on student loans. I'm lucky I have 7k in the bank and 10k in student loans to pay off since I'm unemployed. I've heard horror stories of people working minimum wage service jobs with 40% of their wages garnished for student debt for an art degree. It is their faults they did it, but its also the faults of colleges and institutionalized higher education creating a culture of dependent debtors when young people leave high school.
  - MordinSolus 14y ago
    And the federal government for encouraging such behavior as well.
RollingJubilee 14y ago
No forgiving. Forgiveness implies someone did something wrong. These debts are illegitimate and should never have existed in the first place. These debts are immoral, if anyone needs forgiving it is the banks. We are not forgiving debts, we are abolishing them.
- wavesounds 14y ago
  I think this is really awesome what you're doing. Can you provide some examples of the kind of debts you're talking about?
corkill 14y ago
Actual wall street gets bailed out by government (taxpayers). OWS wants taxpayers to voluntarily bailout private individuals. I understand the human side of it, helping relieve people of debt seems like a noble cause. But the economics of it seem so warped to me, can someone explain why allocating money to forgive private debt is a good thing economically?
- logn 14y ago
  When the markets dropped and wealth "vanished" the government fixed it by adding back that wealth by printing money and giving it to banks. Same concept with giving it to people. OWS and like-minds oppose corporate welfare when it's not afforded to common people.
conductr 14y ago
Do these people still get stuck with a crappy credit rating? Doesn't seem fair to everyone else if their score stays good due to OWS picking up the slack
SeoxyS 14y ago
Instead of operating this as a charity (doesn't scale), why not sell the debt back to the original lendees at face value. (Buy back your $15k loan for $500.) I guess that wouldn't be legal, though?
- malandrew 14y ago
  Personally I think they should try to recoup the face value from the debtor. If my debt was among the debt bought by OWS and they contacted me giving me the option to pay it off at face value so they could move forward with helping others, I'd pay it off in a second.
  - lmm 14y ago
    Which means you're probably not the kind of person who gets into this kind of debt.
    - malandrew 14y ago
      Actually I am. In fact, you'd be amazed at how many people are in this kind of debt who has learned their lesson and would love to be able to get out the debt once and for all.
noonespecial 14y ago
I detect the possibility of a closed debt-like loop. There must be a way in this system to buy my own $14,000 debt for $500 and forgive myself. Its just a matter of path-finding. So theoretically, I can travel backwards in debt... Profit!
- kijin 14y ago
  Very interesting possibility. Perhaps OWS should buy a debt for $500, and instead of outright forgiving it, sell it back to the debtor for a symbolic amount such as $1. Maybe this will have different tax implications than what the top comment suggests?
- lmm 14y ago
  If your financial circumstances are bad enough that your creditors would sell your $14,000 debt for $500, you can probably do that deal directly with them. Try giving them a call and talking about a payment plan.
lifeisstillgood 14y ago
For me the big question is whose debt do you forgive first? You are making a political statement here - great. You are making an even bigger one if you choose to forgive the debt of White folks before black, black before White, republicans and democrats, short v tall and fat v thin even a lottery seems to send the wrong message And doing it blind by just buying anonymous tranches will reveal the biases of the original moggage sellers. A mess I would not like to sort through ps at 30:1 anyone have an idea total needed to be raised to forgive everyones debt? Even ignoring Market reproving to take this into account?
pmorici 14y ago
What are they talking about when they say, "As you can see from our test run, the return on investment approaches 30:1. That’s a crazy bargain!" Is that a joke or are they actually making a return on the investment?
- aidenn0 14y ago
  I think the theory is that it's 30 times better than giving $500 to people who are broke.
  - greedo 14y ago
    I bet if you asked the broke person, $500 would be far more useful than abolishing a long ignored and never to be paid debt.
mynameishere 14y ago
How to design a shit website . com
- mkr-hn 14y ago
  Graypost is the penalty for sassing howtosharpenpencils.
johnx123-up 14y ago
Not sure why the OP's title Occupy Wall Street is buying up debt and forgiving it immediately was changed to The People's Bailout (that was more meaningful, IMHO).
chmike 14y ago
I really don't understand the principle. Is it possible a bank would sell a 10K$ dept for 500$ ? The root of the problem is that banks or credit companies sold loans to people who were unable to pay back the loan. The banks and credit companies new it but didn't care. This is criminal. The people who took the loan weren't educated enough or in proper control of their impulsions. In don't see much difference with selling drugs in the open. I've been told that in Belgium each loan of the citizen are registered in a national file. If that person become insolvent, any loans to that person not registered or given when he was above 33% may be erased by a judge. This is to provide a natural incentive to loaners to avoid screwing people. Buying loans is like trying to emptying a sinking ship with a spoon. Fix the hole first !
- saraid216 14y ago
  > Buying loans is like trying to emptying a sinking ship with a spoon. Fix the hole first ! Mass sit-ins didn't seem to fix the hole. Why not relieve what they can, and possibly build some story-ammo for their next attempt? Or are you actively working on fixing the hole and have useful suggestions on going about it?
deleted 14y ago
[deleted]
thezoid 14y ago
Won't this run the risk of causing out of control inflation?
mkr-hn 14y ago
I wasn't surprised by the examples of the just-world fallacy running amok in this thread, but I was surprised by how many people made counterarguments. Is HN finally getting a broader worldview?
mkr-hn 14y ago
I see a few people coming at this discussion from a disturbing place. They seem to exist in a world of absolute rights and absolute wrongs, where no leniency can be granted based on the circumstances of the wrong, and no sympathy, empathy, or support is granted to account for the life that led to the wrong. It sounds like a sad and hostile world.

219 points by dorkitude 14y ago

cjdrake 14y ago

When did HN become reddit /r/politics?

saraid216 14y ago
Last Tuesday.

pooyak 14y ago

How does buying debt from creditors work? Would something like this actually cause buying debt more expensive and thus benefit creditors instead?

Volpe 14y ago
Not really, because it could just set a metric on how cheap debt is before it purchases (i.e the 30:1 return they mentioned). In the end creditors want to get rid of risk, so if someone isn't paying the loan, getting 1/30th of that money is better than 0. I don't see how this could create a competitive (and thus drive prices up) situation.
- ISL 14y ago
  If I understand things correctly, it may drive borrowing costs down by lowering the lender's risk exposure. (If you loan money to someone, and they don't pay you back, with this program there's a tiny chance that OWS will, lowering your risk. Curious to see OWS bailing out bankers as well as debtors.)
scrumper 14y ago
Generally, any time there is more demand for something the will increase. OWS entering the market for certain kinds of distressed debt would be expected to increase the price of that debt - the group of buyers in the market has increased by one, so there is more competition for the asset. There is absolutely nothing wrong with this at all. The creditors are simply selling the debt to try and recover something from their original loan; getting more back than the would have a week ago is great. It doesn't matter to them whether the buyer is going to forgive the debt or collect it with men in leather jackets and hammers; they've sold, they've got back a few cents on the dollar and it's not their problem anymore. How does it work? The debt is an asset belonging to the original creditor. To use the $14,000 example in David Rees's post, creditor XYZ made a loan to debtor ABC for, say, $10,000 a few years ago. They made that loan expecting to receive $14,000 back over time - that's why they did it. Now, ABC looks unable to repay the debt. The obligation still exists, but it's no longer practical or profitable for XYZ to try and recover it. XYZ has no men with hammers, no provision for accounting for irregular payments or special arrangements and no real interest in hanging on to this now-useless asset. Luckily for them, there are other companies which do want that asset, but because of the difficulties in collecting on it they're not willing to pay a lot. $500, in this case. It's worth spending $500 with the hope of collecting $14,000; if you spend $500 enough times then you'll eventually get back a few $14,000s and now you have a business. The price reflects the probability of getting that money back. In this case, very, very unlikely indeed, and if something's that cheap on Wall Street then you can be sure nobody wants it. So that debt is bought and sold like anything else, according to the business needs of the various people involved. Your old neighbour's beaten old '68 Mustang might have been a piece of junk to him - it was too rusty to pass inspection - so he sold it for a few thousand, happy to get rid of a problem. To a specialist in vintage Fords, though, that car is worth a lot after they put the work in. In this case there is an opportunity for a body with a bit of spare cash to benefit individual debtors by forgiving their loans, while helping creditors stay in business - and their employees feed their families - by buying their crappy assets at market rates. They are adding both charity and liquidity to a gummed-up market with very real people suffering in it.
- malandrew 14y ago
  Question: If OWS does this often enough to the point it becomes expected by debtors (i.e. "I won't pay because maybe I'll win in the OWS debt lottery"), wouldn't that in effect reduce the number of people that would actually pay back the $14k? And assuming it does have a global effect that should depress the market value of distressed debts further, right? How can OWS depress the probability that creditors will get their money back enough so that the cost of buying debt becomes cheaper?
  - pmorici 14y ago
    At the point that OWS is buying the debt it has likely already effected the individuals credit record and score which would make it much more difficult for the person to get additional credit for some number of years.
  - scrumper 14y ago
    Moral hazard for private debtors, in effect? It's interesting, but OWS would need to be buying a LOT of debt for it to have an effect. It's also quite a bad trade from the point of view of the debtor: if OWS doesn't buy their particular obligation, they are in a world of trouble.
- washedup 14y ago
  True, nothing wrong with this, but a repercussion would be increasing interest rates, which would undoubtedly drive some debtors to default on their loans.
  - scrumper 14y ago
    How so? Making the creditor's loan pool more profitable (by increasing the resale price of defaulted debt) reduces their overall risk, which leads to either more loans being made or a reduction in rates.

abdurraheem 14y ago

someone should write a guide on how to buy up your own debt for 1/30th of the cost

marklabedz 14y ago
At a very basic level, convince the credit card company (or hospital, bank, etc), that they will never collect even a penny from you and incur the hit to your credit rating that such activity entails. To actually purchase the debt, you'll likely need to be licensed according to your local jurisdiction.
canadiancreed 14y ago
Indeed. I know that if I can buy a dollar of debt that I owe for a nickel, I want in on that. It'd make things a lot easier on my pocketbook.
- malandrew 14y ago
  More interestingly, how would the 1099-C work in such a case. Wouldn't it be like matter and anti-matter colliding wiping each other out since you would simultaneously incur a tax-deductable loss and a taxable gain of equal value?
  - patio11 14y ago
    sigh No. If you buy $10k of debt for $500, the debt buying business' basis in the debt is $500. If they cancel it, they can deduct $500. If $10k of your debt is forgiven, you get 1099-C'ed for $10k in income. Net-net, this would cause $9.5k in income if you went through with it.
    - Firehed 14y ago
      Still, taxes on $9500 are way lower than the $10000 you originally owed, so it sounds like a win. Until everyone starts doing this and the whole system collapses, at least. That money isn't coming from thin air.

loudin 14y ago

So, what would prevent me from going into a massive amount of debt, not repaying it, and asking everyone else to foot my bill? This seems like OWS is saying, "Well, corporations got greedy and were bailed out. Now it's the people's time to do the same thing." Why is something, when supported by a corporation, immoral when the same thing, supported by "the people", is righteous? This seems like it's just encouraging bad behavior all around. Debtors get some money, people in debt get a massive discount, and people who play by the rules are even more at a disadvantage. We need to restore trust in the system by educating people and holding corporations accountable for fraud - not by undermining the loan system. This move by OWS sickens me.

gmkoliver 14y ago
You make it sound as if people who play by the rules can't have distressed debt. Is that what you mean?
perfectm 14y ago
It's called bankruptcy. 7 years of never being able to have credit.
- rosser 14y ago
  Are you kidding? They hand out credit cards like candy to the recently bankrupt.
  - malandrew 14y ago
    TBH that's the problem of the companies handing out the credit cards. Companies that do that are making a business decision. You and I need not worry about their business model because they have their own spreadsheets with assumptions of how many people will not pay.
  - RyJones 14y ago
    This was my experience (by proxy, my aunt went bankrupt and the day it was final, bought a new car and had tons of credit card offers). They do this because they know you can't go bankrupt again for quite a while, so you're on the hook the second time.

cypherpunks01 14y ago

This is a pretty interesting idea, economically speaking. Does anyone know what is necessary in order to become a debt broker? Being able to buy your own debt (by proxy) for pennies on the dollar might have pretty broad implications.

HeyLaughingBoy 14y ago
I think you just need to get a debt collector's license and that's not difficult. I'd ask my wife (used to be a collector), but she's asleep ATM. We did discuss starting a collection business years ago so I could learn the business and write software for it (apparently the tools they use are a royal pain), but she wasn't interested in getting back in the field and I lost interest. Bear in mind, though that to buy debt at pennies on the dollar, the debt is going to be very old (5+ years old at least probably) and the seller is only selling it because they're convinced they will never be able to collect. You're also looking at buying large blocks of it.
- patio11 14y ago
  You dodged a bullet. It is soul-crushing work. Your mission, should you choose to accept it: you buy $10,000 of, say, phone bill receivables, with the average in the $250 range, for $500 from the debt collection company which previously worked them for a year and got nothing. You use a commercial database and are able to identify phone numbers for half of the debtor. The "fun" now begins. You begin getting told that the debtor is deceased, told that the debtor ran out on her three years ago, told that the debtor owes $300,000 due to uninsured medical expenses, told that the debtor did not authorize the debt and that was in fact his ex-wife's cell phone, told that the debtor has to choose between paying for Christmas and paying this bill, etc etc etc. This is of the 10% of debtors who will speak to you and not just curse loudly into the telephone. Some of those debtors are actually telling the truth, by the way.
- malandrew 14y ago
  How large is "large"?

heyrhett 14y ago

The problem that I see with this is that once your debt is sent to collections, that mark is already on your credit report for 7 years, even if you pay off the debt. So, "forgiving" the debt is pretty meaningless. People still have their credit report tarnished, which leads to higher interest rates, higher car insurance, and is basically another way to oppress people who are already poor. The only advantage to the debtors in this case is that they won't get phone calls from collection agencies. It's a nice idea though.

HeyLaughingBoy 14y ago
Seven years goes by in the blink of an eye once you're old enough ;-) Forgiving the debt is not meaningless: it's a big chunk of money you don't have to pay off. Granted, it's better to work with the creditor and get them to settle for a smaller amount, but a $15k debt removed from your record is not likely to cause you $15k of increased expenses over 7 years.
- malandrew 14y ago
  I'm actually interested in knowing if I bought the debt of someone else, could I write whatever I wanted on their credit report? For example, could I purchase $15k worth of debt for $500 and then forgive the debt and report to the credit agency that it was paid in full?
  - heyrhett 14y ago
    You can't erase the statement that the debt was 180+ days late and sent to collections. The original debt holder could erase that statement, but they have absolutely no incentive to, since they took a 97% loss on your debt. A single late payment like that will probably drop your FICO score 150-200 points.
    - toomuchtodo 14y ago
      Not true. I walked away from my primary residence because it lost over $100K in value. My credit score only dropped from ~705 to 655 (per Creditkarma.com). Also, only one of my creditors lowered my credit limit (Citibank). American Express didn't even blink, and I've got a Platinum card with them with a $75K+ limit. To date, I've missed over 22 payments on my mortgage, and my credit score still remains fairly usable (I may complete a short sale, or may let it forclose. Depends on how amiable the noteholder is to both scenarios). You've been lied to. The risks of walking away from most debt is highly overrated.

gmkoliver 14y ago

Does anyone have a number for the size of the consumer distressed debt market? Not getting much luck searching so far.

marknutter 14y ago

How does OWS think this debt accumulated? Debt isn't some random accident like getting hit by a car while crossing the street. You have to get yourself into debt. It used to be taboo, but it's acceptable to get into debt these days and worse yet, walk away from it. OWS, to me, represents an entitled generation.

gmkoliver 14y ago
Debt isn't some random accident like getting hit by a car while crossing the street. No, but distressed debt can be.
narcissus 14y ago
"Debt isn't some random accident like getting hit by a car while crossing the street." Except debt can be exactly due to some random accident like getting hit by a car while crossing the street and you don't have the insurance to pay for the medical bills. I'm not saying that this is true for all of the OWS debts: probably not even the majority. I'm just saying that it's not as easy as "it's your fault you're in debt".
- tsotha 14y ago
  >Except debt can be exactly due to some random accident like getting hit by a car while crossing the street and you don't have the insurance to pay for the medical bills. That's why we have bankruptcy laws. From what I heard at the time, the big hobby horse for the OWS people was student debt, which can't be forgiven in bankruptcy. And that kind of debt is entirely optional.
  - sc68cal 14y ago
    That's why we have bankruptcy laws. Yes - bankruptcy laws that were passed in 2005 which made it significantly harder to get debt forgiven in bankruptcy, and also removed some forms of debt from being able to be discharged in bankruptcy: https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_and_Consumer_Protection_Act https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_an... It was widely claimed by advocates of BAPCPA that its passage would reduce losses to creditors such as credit card companies, and that those creditors would then pass on the savings to other borrowers in the form of lower interest rates. These claims turned out to be false. After BAPCPA passed, although credit card company losses decreased, prices charged to customers increased, and credit card company profits soared. http://ssrn.com/abstract=1157158 http://ssrn.com/abstract=1157158 And that kind of debt is entirely optional. Not when the majority of jobs that create a vibrant middle class in the post-industrial United States require at least a college degree.

patio11 14y ago

For the benefit of folks who might not understand how debt collection works, which may include OWS: if you buy $10,000 of an individual's debt for $500 and then forgive the debt, they have just incurred income of $10,000 and are obligated to pay taxes on it exactly as if you had handed them $10,000 in cash for services rendered. If you don't inform the IRS that you forgave the debt, via a 1099-C, you're going to get wrist-slapped mightily if they think it is an honest mistake or, if you're, say, doing it as a political statement, you will be afforded the opportunity to make your political statement in front of a judge hearing your case for criminal tax evasion. This is not accounting advice, by the way. There's some wrinkles if the debt was caused by your principal residence, due to some of the recovery measures passed two years ago. If its, say, CC or medical debt, though...

heyrhett 14y ago
Good point, patio11. If debtors don't pay back their debt after after a certain time period, they are supposed to report it as income, but I doubt very many do. Setting up an organization like this puts the onus on the organization to file the 1099-C's
- lifeguard 14y ago
  Unpaid interest owed on debt would never be income.
malandrew 14y ago
Couldn't OWS just hold it forever and not do anything with it? i.e. "Look I bought your debt, you don't have to pay me a penny for it ever, but I can't officially forgive you since to do so would subject you an income tax obligation. Just don't worry about it ever again and get on with your life."
- patio11 14y ago
  Conspiracy to commit tax fraud.

aristus 14y ago

Careful; debt forgiveness can be treated as taxable income. The lucky winners may end up with a nasty unforgivable tax bill.

washedup 14y ago

Won't a result of this be an increase in the "cost" of debt, and hence interest rates on variable loans would raise for everyone else while other's are being paid off? Seems bad..

wavesounds 14y ago
No by buying bad debt that nobody wants to buy you are adding liquidity to the market, its a win win for everyone involved.

rdl 14y ago

It would be cool if someone created something like prosper, where I could see bad debt from people, and they could make pitches for why I should extinguish theirs. For $x, I could purchase and extinguish N x $x in debt, where N is some function of type, time to maturity, etc. I personally would be more likely to buy deserving-seeming medical, failed business, etc. debt than car notes or whatever, but maybe others would have their own preferences.

abofh 14y ago
As a former prosper lender - that's basically what it is.
fr0sty 14y ago
So people list their bad debts on a website and compete for the most compelling sob story to get them written off. I actually cannot imagine how this would lead to better outsomes than just buying and forgiving debt blindly. You would preference the best and boldest liars over people who can't bring themselves to debase themselves in front of the world in hopes of your patronage. Buying blind at least solves the adverse selection problem.
- lizzard 14y ago
  I would not mind buying and forgiving someone's debt blindly. I've been in situations where $2000 debt destroyed my ability to survive independently. While now I could pay off 2K instantly without even feeling it. How lovely it would be to relieve someone of that burden!
pmorici 14y ago
When you invest in debt via peer to per lenders like Prosper and Lending Club you aren't actually buying the persons debt you are purchasing a registered security from the respective p2p company who is the actual holder of the debt. The security is structured in such a way that only the p2p company has the right to collect on the debt should the debtor default.
- 14y ago

brianbreslin 14y ago

This is awesome beyond words.

patrickgzill 14y ago

What if the person contests the debt in some way, but OWS buys it and forgives it anyway? Would the IRS agree that contested debt should be treated differently come tax time?

JumpCrisscross 14y ago

This is a curious activity - non-performing debt, i.e. notes not generating any cash for the holder and thus not extracting any cash from the ower, are being exchanged at market value, thus transferring cash via an intermediary (OWS) from a donor to the lender. This results in a non-cash accounting change for the ower and a boon for the lender. Economic activity is boosted if the lender's investment/consumption is more sensible than the donor's - ower does not figure into the algebra. This is likely to be stimulative if the lender's marginal propensity to save excluding risk investing is low. If these are performing loans, on the other hand, the donor is, via OWS, acting as a market maker for the lender, providing them with liquidity/immediacy while granting the ower cash flow. This is like a stimulus payment to the ower (provided they consume the extra cash flow or invest it in risk assets). It's also a bail-out to the lender. This is structurally identical to the Federal Reserve buying banks' assets, e.g. loans, and Washington increasing high-velocity fiscal spending. OWS's plan has the downside of being market distorting (via moral hazard) while the prior is less so (Fed's buying activity can be distorting if not done properly or if amped up to supplement Congressional inaction). I came here expecting to chastise this but, economically speaking, it's a better use of surplus savings than having them sit idly in the money markets. It is, though, worse than building things, funding research, or helping feed starving children. Kudos, still, for beating par (the money markets).

intended 14y ago
I strongly doubt the bonds/underlying is being sold at market value - I assume its similar to factoring (? I forget if thats the precise term) but these are likely Non Performing loans. The original debt would be sold at fractions of the original price by banks to a collection agency. From what I remember of economic theory, this is essentially a stimulus directed at those who have the hardest time dealing with debt. So on a simple superficial take - not bad at all, it seems even more targeted than a full stimulus to maintain all aspects of the economy. Edit: TO be clear - I agree with your final point. Essentially you are saying that if we invest in growth and growth increases, it would be the best way for people to get out of their quagmires. In that respect, such a debt forgiveness is linked with increasing growth from what I recall.
- 14y ago

oscilloscope 14y ago

If this happens on a large scale, will it cause deflation? It seems like it would reduce the money supply.

akamel 14y ago
the debt was already downgraded from say 14k to 500$ so the loss was already taken; in relative terms an extra 500$ loss is meaningless.

bmccormack 14y ago

After OWS forgives random debt, is it also going to help teach people how to avoid debt again? By avoiding keeping a balance on credit cards? By saving up an emergency fund for a rainy day? By saving for retirement? A one-time forgiveness of debt is a generous gift to be received, but unless you have the habits to avoid debt again, it will just grow back again over time.

potatolicious 14y ago
http://www.washingtonpost.com/wp-srv/politics/documents/american_journal_of_medicine_09.pdf http://www.washingtonpost.com/wp-srv/politics/documents/amer... ~62% of all bankruptcies in the US have a direct medical cause. Credit card debt and debt from overconsumption is certainly a problem, but if 62% of the debt forgiven arises from unexpected medical bills, I'd call that some pretty good work. Though I'm somewhat uncomfortable with the everyman shouldering the fiscal brokenness of America's thoroughly inhumane and downright barbaric health care system.
- greedo 14y ago
  Then set up a charity where people with medical bills can submit them and ask for some assistance. That way they stay out of debt/bankruptcy, have a cleaner credit report, and can focus on their health issues not financial issues.
  - potatolicious 14y ago
    So... universal health care then :P An organization that receives all your medical bills, keeps you out of debt/bankruptcy, and charges you an amount that it determines would not cause undue hardship? Like insurance, except everyone qualifies! Slight side note: this whole discussion is somewhat depressing, but I've come to expect this from HN lately. This whole thread is divided into two rough parts: people addressing legitimate questions about the legalities of this venture, and people clucking derisively at the stereotypical straw man of the poor. Whether it's sexism in tech, racism around the world, or the plight of the American poor re: medicine, there are always a ready army of the privileged ready to attack people for imaginary and insultingly intellectually lazy stereotypes.

joe_the_user 14y ago

The reason that any bank that sells debt would attempt to avoid this kind of thing happening should obvious. Moral hazard. If a debtor can refuse to pay and then only pay what the bank really then thinks the loan is worth (with few if any penalties), then every debtor is going to do that. Obviously, OWS is doing this as a political statement that the debt system in the US is corrupt, unjust or something. It does seem like things such as education shouldn't throw a kid into life-long debt from the get-go or the benefits should be more, uh, clear. The student loan system today generates a huge number of defaults. The contradictory situation where the banks naturally write down this debt but work hard to keep the written-down out of the hands of the debtors may be an Achilles heal of the system.

zanny 14y ago
> The student loan system today generates a huge number of defaults. Too bad you can't default on student loans. I'm lucky I have 7k in the bank and 10k in student loans to pay off since I'm unemployed. I've heard horror stories of people working minimum wage service jobs with 40% of their wages garnished for student debt for an art degree. It is their faults they did it, but its also the faults of colleges and institutionalized higher education creating a culture of dependent debtors when young people leave high school.
- MordinSolus 14y ago
  And the federal government for encouraging such behavior as well.

RollingJubilee 14y ago

No forgiving. Forgiveness implies someone did something wrong. These debts are illegitimate and should never have existed in the first place. These debts are immoral, if anyone needs forgiving it is the banks. We are not forgiving debts, we are abolishing them.

wavesounds 14y ago
I think this is really awesome what you're doing. Can you provide some examples of the kind of debts you're talking about?

corkill 14y ago

Actual wall street gets bailed out by government (taxpayers). OWS wants taxpayers to voluntarily bailout private individuals. I understand the human side of it, helping relieve people of debt seems like a noble cause. But the economics of it seem so warped to me, can someone explain why allocating money to forgive private debt is a good thing economically?

logn 14y ago
When the markets dropped and wealth "vanished" the government fixed it by adding back that wealth by printing money and giving it to banks. Same concept with giving it to people. OWS and like-minds oppose corporate welfare when it's not afforded to common people.

conductr 14y ago

Do these people still get stuck with a crappy credit rating? Doesn't seem fair to everyone else if their score stays good due to OWS picking up the slack

SeoxyS 14y ago

Instead of operating this as a charity (doesn't scale), why not sell the debt back to the original lendees at face value. (Buy back your $15k loan for $500.) I guess that wouldn't be legal, though?

malandrew 14y ago
Personally I think they should try to recoup the face value from the debtor. If my debt was among the debt bought by OWS and they contacted me giving me the option to pay it off at face value so they could move forward with helping others, I'd pay it off in a second.
- lmm 14y ago
  Which means you're probably not the kind of person who gets into this kind of debt.
  - malandrew 14y ago
    Actually I am. In fact, you'd be amazed at how many people are in this kind of debt who has learned their lesson and would love to be able to get out the debt once and for all.

noonespecial 14y ago

I detect the possibility of a closed debt-like loop. There must be a way in this system to buy my own $14,000 debt for $500 and forgive myself. Its just a matter of path-finding. So theoretically, I can travel backwards in debt... Profit!

kijin 14y ago
Very interesting possibility. Perhaps OWS should buy a debt for $500, and instead of outright forgiving it, sell it back to the debtor for a symbolic amount such as $1. Maybe this will have different tax implications than what the top comment suggests?
lmm 14y ago
If your financial circumstances are bad enough that your creditors would sell your $14,000 debt for $500, you can probably do that deal directly with them. Try giving them a call and talking about a payment plan.

lifeisstillgood 14y ago

For me the big question is whose debt do you forgive first? You are making a political statement here - great. You are making an even bigger one if you choose to forgive the debt of White folks before black, black before White, republicans and democrats, short v tall and fat v thin even a lottery seems to send the wrong message And doing it blind by just buying anonymous tranches will reveal the biases of the original moggage sellers. A mess I would not like to sort through ps at 30:1 anyone have an idea total needed to be raised to forgive everyones debt? Even ignoring Market reproving to take this into account?

pmorici 14y ago

What are they talking about when they say, "As you can see from our test run, the return on investment approaches 30:1. That’s a crazy bargain!" Is that a joke or are they actually making a return on the investment?

aidenn0 14y ago
I think the theory is that it's 30 times better than giving $500 to people who are broke.
- greedo 14y ago
  I bet if you asked the broke person, $500 would be far more useful than abolishing a long ignored and never to be paid debt.

mynameishere 14y ago

How to design a shit website . com

mkr-hn 14y ago
Graypost is the penalty for sassing howtosharpenpencils.

johnx123-up 14y ago

Not sure why the OP's title Occupy Wall Street is buying up debt and forgiving it immediately was changed to The People's Bailout (that was more meaningful, IMHO).

chmike 14y ago

I really don't understand the principle. Is it possible a bank would sell a 10K$ dept for 500$ ? The root of the problem is that banks or credit companies sold loans to people who were unable to pay back the loan. The banks and credit companies new it but didn't care. This is criminal. The people who took the loan weren't educated enough or in proper control of their impulsions. In don't see much difference with selling drugs in the open. I've been told that in Belgium each loan of the citizen are registered in a national file. If that person become insolvent, any loans to that person not registered or given when he was above 33% may be erased by a judge. This is to provide a natural incentive to loaners to avoid screwing people. Buying loans is like trying to emptying a sinking ship with a spoon. Fix the hole first !

saraid216 14y ago
> Buying loans is like trying to emptying a sinking ship with a spoon. Fix the hole first ! Mass sit-ins didn't seem to fix the hole. Why not relieve what they can, and possibly build some story-ammo for their next attempt? Or are you actively working on fixing the hole and have useful suggestions on going about it?

deleted 14y ago

[deleted]

thezoid 14y ago

Won't this run the risk of causing out of control inflation?

mkr-hn 14y ago

I wasn't surprised by the examples of the just-world fallacy running amok in this thread, but I was surprised by how many people made counterarguments. Is HN finally getting a broader worldview?

mkr-hn 14y ago

I see a few people coming at this discussion from a disturbing place. They seem to exist in a world of absolute rights and absolute wrongs, where no leniency can be granted based on the circumstances of the wrong, and no sympathy, empathy, or support is granted to account for the life that led to the wrong. It sounds like a sad and hostile world.