The concept of moral hazard is a slippery little bugger. Usually when I hear folks spouting it, I put my hand on my wallet and listen very closely. Usually the person spouting has an idea that his behavior has been all virtuous and others have, or in the near future will, use him sorely.
In today’s America, I believe that I would be pretty hard pressed to find a person who was without fault in the debacle we are experiencing. Like Diogenes searching for an honest man, I think that I would have to get a lamp and a walking stick and go walkabout. The most likely sources would be kinda odd sorts, Amish and Mennonites and Hutterites would figure prominently. There would be a sprinkling of aged and new hippies, some genuine constytooshunalists, and the occasional odd duck.
But these folks would be in a serious minority. One in one hundred would surprise me to no end. So with that as my starting premise, why don’t we call it a push and have a jubilee with forgiveness of all debt? No credit cards, no mortgages, no derivatives, no CDO’s, no SIV’s, no hedge funds.
Poof, no one owes anyone anything.
Could it be any worse than what we are going to have to do anyway?