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.
Start again.
Could it be any worse than what we are going to have to do anyway?
11 comments:
Right On!!
Some common sense being spoken here. Sick to death of Bush Bashing!!!!
Not a huge fan of his, but have the bad guys hit us since 911?
Works for me. But all those who are retired or near retirement might object to having their savings wipped out and being forced back to work..
Read that Americans are all or nothing kind of people we want our wins & successes to not only be wins but huge smashing wins and our losses the same. Economy going down the toliet there must be scapegoats. Bush is the biggest & easiest because his political life is over so he is the politicians scapegoat. The major banks that were not bailed - banking. Madoff - financier & I'd bet there are some thanking God he is the one. If the hordes are still not satisfied a few more will fall until satisfaction is reached. How many in enron actually served long sentences?
What bothers me: MSN, the right, the left, and every prepping blogger I read all agree that this is Bush's mess. Now I have to step back because there shouldn't be that much agreement. Sorry there shouldn't. Somebody should be shouting conspiracy or something but it is quiet, too quiet.
If we did forgive all the debts how long would it be before people where back in the rut again?
One source of revenue for GM is auto loans. So, if we wipe out all debt then that income stream is gone. GM, already in trouble, won't survive. All of GMs employees will lose their jobs and so can't buy food, gas, healthcare, etc. Plus anyone owning stock in GM loses their investment plus the income they get from dividends.
Every company that does any lending will be in the same trouble as GM. Because debt is wound throughout business, wiping out US debt would destroy every economy in the world.
The Ponzi scheme must be maintained. The deficit will go nuclear, but to reduce the chances of collapse, it must be done.
BTW, *my* behavior has been virtuous. I'll take the "odd duck" label. I'll blog tonight about my latest dropping out scheme.
I gave this a bit more thought and discovered a major flaw. We have a fractional reserve based system and a fiat currency.
By wipping out all debt you would be contracting the money supply creating the greatest deflation to have ever hit the United States making what happened in the Great Depression look fairly mild by comparison.
The dollar which is based on debt would instantly be worthless and we would instantly revert back into a barter based system.
So in retrospect I'm gonna have to say it might not be a good idea unless thats what you want to happen.
It ain't just Bush's mess. There's 2oo and some odd other pukes in the House and Senate that bear full responsibility as well....
'Gringo, I'd much rather see us "little folk" bailed out than a buncha spoiled bankers and corporate muckity mucks.... I reckon the money would be much better spent by us folks!
So Chris, why would you not want to see an inherently corrupt Ponzi scheme go away? It is doomed to failure anyways, so why drag it out? Let it fail, get it over with, so we can get on with building something new and better. Something honest and sustainable.... Personally, I don't want to put the collapse off on my kids just so I can have everything remain "normal".....
At least two and maybe three generations now exist due to the buildup of all this debt. My guess is that this demographic would be much smaller if the concept of delayed gratification hadn't been lit on fire and sent to outer space.
Thus, a jubilee would have the unfortunate unintended consequence of killing millions.
Overall folks, I think that it is time to stop trying to save the system as it currently stands.
It is an unfortunate reality that, when the system breaks, it will hurt a lot of folks. I fully understand and accept that I might not come through it alive. I also understand that even my children might die in the process.
But the reality is that the system is broken. The natural resources that fuel it are dwindling. The confidence that serves as its accelerator is gone. What we have is a greedy, self serving oligarchy trying to figure out how to bind us to their whim with pieces of paper.
The spasm is coming. No amount of good intentions or planning can slow the fall of a broken system. It is going to hurt a lot. I would recommend the best preparations that you can come up with.
Godspeed.
Mayberry
I dont care if it collapses. I'm prepared and willing to sacrifice for my children and my children's children.
Its just not a common trait amongst most of the population. Most seem intent on a slow controlled crash vs a violent one.
relevelrr:
You have hit the nail on the head. Because of the overuse of resources and the ponzi-like nature of the economy, we are situated between a rock and a hard place.
There is definitely a population overshoot that was allowed by the current industrial scheme.
Population biology is a rude and unforgiving science. It can be tricked for a while, but it will always come back, an usually with a vengeance.
They are derided nowadays by the feelgood crowd, but, unless I am seriously mistaken, they will soon be getting their last laughs. Ehrlich was probably right after all.
Things have to be brought back into balance. What preppers strive for is to allow their offspring a better chance of propagating after the correction.
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