Ricochet is the best place on the internet to discuss the issues of the day, either through commenting on posts or writing your own for our active and dynamic community in a fully moderated environment. In addition, the Ricochet Audio Network offers over 50 original podcasts with new episodes released every day.
All Debt is bad and sad and ergo should go away
Doc B – like our old long-lost friend Doc Jay, but probably less likely to look at your chart, say “screw it,” rip out your tubes and drive you to Vegas – wrote about a patient thrilled by the promise of college debt elimination. The patient did not have a firm grip on things like “economics” or “reality,” but she’s not alone.
As long as we’re talking about college debt relief, why not all debt? The New Yorker is here to tell you what it means in terms of PHILOSOPHY and also justice.
In Congress, the freshman representatives known as the Squad have lifted up grassroots demands to cancel student loans, back rent, and mortgage payments.
But probably not your mortgage payment, because you can pay it.
Debt relief, Representative Ayanna Pressley, of Massachusetts, told me, makes sound economic sense, given that working families would put freed-up money “right back into communities, right back into the economy.” Pressley added, “We have to bail out the American people.”
Hold on. Wait a gol-durned minute. You mean if people have relief from mandated financial obligations, they use the money in other ways that stimulates economic activity? It’s trickle-out economics!
Though it would help struggling households make ends meet, debt relief isn’t just about money. There are also deeper moral questions to consider—and this is where David Graeber’s work is indispensable.
This is where you sigh with satisfaction and settle into the warm bath of moral questions the New Yorker writers permit you to entertain, and you smile to yourself: I have no idea who David Graeber is, but I will soon, and then I will know something indispensable.
In “Debt,” he sought to challenge his readers to rethink the very notion of owing: Who owes what to whom?
“Stop paying and find out” seems the easy answer to that one
Do all debts need to be repaid?
“Stop paying and find out” seems the easy answer to that one
Can our real obligations ever be quantified?
Dude have you ever looked at your hand? I mean really looked at it
As an anthropologist who had studied gift exchange,
Oh, a financial expert, is what you’re saying. “At E. F. Hutton, we make money the old fashioned way – by anthropological inquiry into the folkways involving gift exchange.”
and an anarchist determined to envision a world beyond capitalism,
Oh, a nutwad. Well, you have to admire his determination; the man sets his clock for 5 AM every day, goes into the study, and spends the fresh hours of the day fiercely envisioning.
“Are you coming down for breakfast?” the wife calls.
“Not yet! I am so close! A few more minutes and I’ll have the post-capitalist world fully envisioned!” Then he frowns and rests his chin on his fists. Okay where was I. No debt, no money, no rent, no banks, no societal heirarchies, no scarcity . . . then what? I’m almost there! I’m so close!
David wanted to help build a world unconstrained by the constant and petty accounting of debits and credits, one where value and worth were not denominated in dollars.
Because no one has any metrics for quantifying anything in life besides dollars, of course. But let’s go with that. We abandon a commonly-accepted medium of exchange to facilitate our daily exchanges of goods and services, and something without any of the characteristics of value and obligation will arise. WHAT IF THERE WAS LIKE, NO MONEY AND WE JUST DID COOL STUFF AND EVERYONE WAS COOL
Debt, he wrote, is “a promise corrupted by both math and violence.”
Well, if you borrow from Tony the Shark down at the social club, yeah
What other types of promises might we make to one another and strive to honor? And, in order to do that, what promises might we have to renegotiate or refuse?
“You make some interesting points sir but you ordered a ham sandwich and you ate it and here’s the bill. You can pay here, or at the cash register. And we don’t take checks.”
Debt cancellation is an essential component of any sensible response to this worsening disaster, especially one attuned to questions of racial justice.
Racism before: minority communities do not have access to credit, and that’s a problem. Racism today: minority communities have access to credit, and that’s a problem. Solution: upend the Etch-a-Sketch. As always, Year Zero beckons, with its boundless justice and limitless potential.
Published in General
Stop making excuses for idiotic socialist slogans, it makes you look bad.
Except that, in a very short time, this will be a cashless society (it’s already happening). No cash, no debt, no credit. No money at all for anyone.
If we’re going to pay for children’s hobbies, like sociology and music theory, then it’s only fair that we forgive small business loan debt as well.
Some of the world’s most clueless people are anthropologists, and some of the world’s worst people are ethicists.
None of it probably will come out of your pocket. It’ll be hot off the presses.
One way or another, it comes out of our pockets, whether through taxation or inflation.
I previously knew a lawyer who specialized in post-foreclosure evictions. He said being unable to repay debt was usually only a symptom of deeper problems in the borrower’s life. Forgiving debt may just paper over other problems and prevent people from getting help they may really need.
Just wait until Mr. Graeber’s great anthropological magnifying glass, as it plods through the history of human financial interactions, lands on Title 11 of the US Code, and he discovers that all the very serious philosophy and ethics of debt and credit and forgiveness, the hard discussions of moral hazards and the stability of economic systems, have been elegantly distilled into modern bankruptcy law. Wait until he discovers that entirely separate courts, courthouses, and specialized attorneys have evolved to handle these questions, and do so every single day of the year in virtually every modern country. You will be able to hear his mind blow from wherever you are.
I think the point is the dude clearly smokes a lot of them.
Reminds me of this, again:
Do you remember the proposal, endorsed by Krugman, that the guvvies or the Fed mint a trillion dollar coin, and make it from pure platinum? Then use it to pay off the debt?
@jameslileks somehow this reminds me of all the talk from a while back about muslim/sharia banking. Remember that? It was going to be so wonderful, what with nobody making any money from anything…
So which will it be: Do we cancel student loan debt, or do we bail out the pension funds of Demo-rat-run states and cities?
Embrace the power of “and”.
This should be required reading for little Dave:
Poems – ‘The Gods of the Copybook Headings’ (kiplingsociety.co.uk)
What doesn’t make sense about the proposal to cancel student loan debt is that the program still continues. So, like amnesty for immigration, we reset to zero the current debt and then simply restart the clock until we get right back to this point. If they really wanted to make an interesting proposal, they should include a provision that brings an end to gov’t-backed student loans and kick the business back to the banks.
I also wanted to make a comment from a different perspective, as a financial coach who helps people with problems like student loans. In my experience, the biggest frustration when facing a seemingly insurmountable pile of student loans is the lack of a plan. It seems most people have just come to terms with it and assume they’ll have it forever, or at least until about the time they retire.
Being a Ramsey Preferred Coach, I talk with them about a scenario in which they pay off their debt in the next 2-3 years. At first, it’s a surprise for them. The realization that it will require huge financial sacrifices can be off-putting even. But when I take them to the other side, in a just a few years, where their student loan is behind, then they can start to think about what an ideal life can look like. Often, our conversations are the first they’ve had where they clearly thought about their future and the possibilities they can create.
So, I’d say that I am all for cancelling student debt. But the debt should be cancelled by YOU.
James (almost) quoted an old show. I (almost) quoted an appropriate reply.
Can’t wait to see it show up on Pawn Stars.
This is what irks me, too — beyond the obvious “unfairness” factor.
Proposals to forgive student debt rarely grapple with the reasons why student debt is such a problem in the first place.
Well, that and people who’ve never been to college and make $35k a year doing “menial” labor will be paying inflated tuition to richly endowed universities (through taxes) to “educate” people who will (supposedly) be making $125k a year — unless they’re anthropology majors who end up working at Starbucks. Not that there’s anything wrong with that.
Has no one ever heard of debt jubilee? At this point, out unfettered credit industry faces so little repercussions for bad investments, they create debt slaves willy nilly and if something borks, why they’re too big to fail!
How is it that we can’t actually give an honest hearing to something like debt jubilee, how cyclical debt cancellation would affect credit awards?
Our system is dealing with low employment and wage earners by throwing credit and welfare at people to “stimulate” the pockets of an ever smaller group of capital holders.
Since the debt is held by many different countries, let alone individuals, how do they part out that coin?
Also reminds me of The Simpsons where Mr Burns originally gets his wealth by purloining a special billion-dollar “bill” or something, that had been specially printed to pay off war debt or something.
Many of our problems are due to the fact that those who set and enforce policy pay no price for being wrong.
I worked hard for a couple of decades to become completely debt-free, so you’ll have to give me a couple of years to run up credit bills like crazy before the jubilee date.
I think everyone who didn’t borrow money to go to college should do it now. (Most state schools have to accept you if you graduated high school.) And then just never make a payment.
On the somewhat pedantic side, I’ll note that part of my IRA is invested in some debt funds.
Rep. Presley, if borrowers are relieved of the obligation to pay back the loans they took out, I’m going to have less money to put back into my community. Somebody’s community put up the loan in the first place, does not have the loan money while the debt remains unpaid, andis expecting to be the recipient of the repayment. Many landlords to whom rent is owed are local firefighters, teachers, engineers, and other people.
I think everyone’s takeaway from this should be to invest in skills – real skills. Money is so meaningless. When the bill finally comes due for all of this crap, we are going to see economic catastrophe. Learn how to grow food. Teach yourself how to make shotgun shells. That kind of stuff is real currency. (I’m in the early stages of beekeeping, good times!)
The kids coming out of these schools are screwed. They have no usable skills whatsoever. They have sociology degrees, but can’t change oil, don’t know how to use power tools, and only eat takeout. It’s sad.
A cyclical jubilee should see an uptick in borrowing at the start of the cycle, with shortened terms, and a decrease in lending at the end of a cycle. It should result in a more naturally occurring inflation/deflation cycle, allowing asset rich people to benefit at the start of a cycle and the cash rich to benefit at the end of a cycle.
This isn’t about running up debt to take advantage of the lenders, but to bring some balance to a system where the lenders never face the consequences of predatory lending.
These kids never should have been given loans in the first place – they were bad investments. But the creditors are never going to feel the pain of betting on a bad investment because we will keep protecting them over giving any kind of grace to a generation that can’t move forward.
If you don’t want to go the grace route, than offer an idea that does bring the risk back to the lender.
IIRC and continuing the fantasy, once the trillion is deposited in a bank, that bank distributes the money to various accounts. I didn’t bother to read the linked article. I just looked up the Krugman quote.
Trillion-dollar coin – Wikipedia