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The People's Bailout

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Re: The People's Bailout

#221

Post by greedo »

potatolicious wrote: post #96
bmccormack wrote: post #81

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.

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 inhu…

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.

Re: The People's Bailout

#222

Post by justindocanto »

elemenohpee wrote: post #205
stickfigure wrote: post #141

Earlier quoted context omitted.

This seems like the key insight about this issue. The debts OWS buys on the cheap are debts that were never going to be paid off in the first place. The net practical effect of this action is to transfer money from well-meaning people into the hands of debt collection agencies. Seems like the only people being bailed out are debt speculators. Doesn't sound like a worthy cause to me.

You're still only thinking in terms of the market. This action is about raising social capital.

The action is people donating money that is going to be put to waste in comparison to their immediate needs. They should change the entire event to fundraising more food, generators, shelter, clothes & necessities for these people.

If they want to do something extraordinary, which it seems they're trying to paint this event as, they should do something extraordinary like take all the money they raise and start building people new houses. That's real 'social capital'.

Re: The People's Bailout

#223

Post by elemenohpee »

greedo wrote: post #217
elemenohpee wrote: post #196

Earlier quoted context omitted.

That's great, unless he needs to drive to get to work in order to get a paycheck and keep his head above water for another week. Do people really not understand that there are people who do not have the luxury of a risk-free life?

Teaching someone to measure risk is part of parenting, and a good sign of maturity. Driving without insurance is strike one in that calculus, and then hitting a pedestrian is strike two. Helping them out of debt is merely enabling strike three in this scenario. Take a look at your local newspapers mugshot section. Ours publishes them online, and when bored, it's a fun diversion. The majority of the arrests are for DU…

Not sure what DUIs have to do with this. I'm thinking about the guy who lost his job, and the closest position he could find was 50 miles away from his home, which he can't move out of without losing a lot of money. He's exhausted from the long commute each day and the stress of being up to his neck in debt, which is what he's distracted by when he doesn't see the pedestrian step out from behind a parked car. It's got nothing to do with maturity or whatever, it's about doing what is necessary to survive and provide for your family. It's pretty callous and insulting to tell someone in this situation that they deserve to be crushed under debt because you don't want to "enable" their behavior.

Re: The People's Bailout

#224

Post by greedo »

aidenn0 wrote: post #144
pmorici wrote: post #131

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?

I think the theory is that it's 30 times better than giving $500 to people who are broke.

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.

Re: The People's Bailout

#225

Post by potatolicious »

greedo wrote: post #221
potatolicious wrote: post #96

Earlier quoted context omitted.

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 inhu…

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.

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.

Re: The People's Bailout

#226

Post by lmm »

JumpCrisscross wrote: post #77

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 mo…

There's a major moral hazard around the Federal Reserve bailouts ("too big to fail"), no?

Re: The People's Bailout

#227

Post by greedo »

elemenohpee wrote: post #223
greedo wrote: post #217

Earlier quoted context omitted.

Teaching someone to measure risk is part of parenting, and a good sign of maturity. Driving without insurance is strike one in that calculus, and then hitting a pedestrian is strike two. Helping them out of debt is merely enabling strike three in this scenario. Take a look at your local newspapers mugshot section. Ours publishes them online, and when bored, it's a fun diversion. The majority of the arrests are for DU…

Not sure what DUIs have to do with this. I'm thinking about the guy who lost his job, and the closest position he could find was 50 miles away from his home, which he can't move out of without losing a lot of money. He's exhausted from the long commute each day and the stress of being up to his neck in debt, which is what he's distracted by when he doesn't see the pedestrian step out from behind a parked car. It's go…

As a society, we expect people to follow norms of behavior; we usually call them laws. Driving without insurance is breaking the law. Driving impaired in the case of alcohol is against the law. Driving impaired because you're tired and exhausted and stressed about life and then striking a pedestrian is usually going to result in either criminal charges or civil charges at the minimum. You might even have to wear a sign...

http://fxn.ws/SwNfY1

EDIT: Here's a link for people who think that anything coming from Fox should be dismissed out of hand immediately:

http://security-today.com/Blogs/REACTION/2012/11/Woman-Sente...

Re: The People's Bailout

#228

Post by sp332 »

rapind wrote: post #190
lifeguard wrote: post #171

Earlier quoted context omitted.

You could buy a specific corporation's debt but I think consumer bad debt is sold in big blocks of anon accounts until you are the owner.

Otherwise it'd be pretty interesting if you could buy your own debt at a huge discount.

This is sort of how collection agencies work, although the discounts here seems to be even steeper.

Re: The People's Bailout

#229

Post by potatolicious »

philwelch wrote: post #150
lifeguard wrote: post #128

Earlier quoted context omitted.

Not only is it bad, a BK on your file means you will have to use 'special' finance to get a car loan and it will be impossible to find a bank to underwrite a sub-prime loan for a house (for seven years). You would also have to pay a higher rent security deposit on an apartment.

If you lose badly enough at credit that you end up declaring bankruptcy, maybe homeownership or car loans aren't for you. Just a thought.

Perhaps not home ownership - but in many (most?) parts of this country a reliable vehicle is an absolute requirement for holding down a job. A bankrupt person, if anything, is in greatest need of a trustworthy car, and is also the most likely to require a loan to do so.

There's also the notion of rent - people who've always had good credit don't really know how different renting is like for people who have bad credit. I came to this country a few years ago with zero US credit rating, and even with a high salary, offer letters, etc, had one hell of a time finding a place to live. Many landlords simply will not consider you, while others charge exorbitant deposits to cover the risk.

The recently bankrupt are also the least able to afford a security deposit several times higher than what everyone else pays.

The reality of credit in the US is that your life gets exponentially harder as your credit worsens, and the difficulty in turning that ship around increases dramatically. People who've never had to suffer from bad/no credit really need to examine this before clucking judgmentally.

Re: The People's Bailout

#230

Post by lmm »

noonespecial wrote: post #126

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!

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.
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