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Croatia just canceled the debts of its poorest citizens

washingtonpost.com

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Re: Croatia just canceled the debts of its poorest citizens

#41

Post by maxerickson »

themartorana wrote: post #35
hackuser wrote: post #11

A similar method of helping the impoverished, one which has strong support among at least some economists (and maybe more widely), is cash transfers directly to the people who need it. That is, don't fund a service for those in need, fund the people directly and they can buy what they need. GiveDirectly is a leading implementation of this idea: https://www.givedirectly.org/ It was founded by economists, and their blo…

I argue, albeit inexpertly, that TARP money given directly to homeowners to make payments on their toxic mortgages would have been of infinitely better societal good than handing b(tr?)illions to banks without any oversight at all. But you are morally bankrupt for taking out a mortgage difficult for you to pay. The bank, however, doesn't have such moral failings for they are not people. Wait...

Saying TARP had no oversight is a bit much. The money mostly got paid back, it wasn't a festival of stealing from the government:

http://projects.propublica.org/bailout/

The best way to look at TARP is as a preservation of the status quo. Whether that was the right thing or not, given how many people have investment assets that are exposed to banking and insurance, the benefits were a lot wider than just to the banking system.

Also there were mortgage relief programs that come out of the bailout:

http://en.wikipedia.org/wiki/Home_Affordable_Modification_Pr...

http://en.wikipedia.org/wiki/Home_Affordable_Refinance_Progr...

They didn't just make mortgage payments though.

Re: Croatia just canceled the debts of its poorest citizens

#42

Post by failed_ideas »

failed_ideas wrote: post #4

In part, I love this idea. However, as someone who struggles with debt, I've worked to the point of causing serious health issues just to keep my head above water, so if Canada were to do this, I'd be more than ticked. The slacker next to me gets a clean slate, and I get an early grave.

Just to respond to all at once, I'm looking for fairness here, not to punish those that couldn't pay debts. There isn't anything 'bad' about not being able to manage debt in and of itself. However, if you took 3 jobs to make ends meet and the neighbour simply took a third mortgage and smoked pot all day on pogey, it isn't fair. And this action doesn't install any sense of responsibility. All this does is encourage those who don't pay their debt to continue to not pay. And in no way does that improve society except for a very small few.

The money should be spent on debt relief, and work with those who have large unmanageable debt to begin sustainable debt management through education. Yes, lower it, but still ensure that people understand what debt responsibility is. Something that was entirely absent in my upbringing.

Simply paying someones debt clears a slate for more debt. It doesn't fix a problem. Give a man a fish and you feed him for a day, teach a man to fish and you feed him for a lifetime.

Re: Croatia just canceled the debts of its poorest citizens

#43

Post by skylan_q »

raverbashing wrote: post #16
rfrey wrote: post #2

The article says the government "convinced" banks and other companies to cancel the debts, but the lenders will not be compensated. It's left as an exercise to imagine how the lenders were convinced. I can see the benefits of getting a large number of people out of what must be a terrible situation - the numbers suggest most of the people affected probably didn't have enough income to even service their debt. But I w…

" allowing the middle class to own property, start businesses, etc," Well, there's this crazy concept called "saving money" where you don't borrow from a bank but rather put some money aside every month to be able to afford something expensive I wonder what would happen to property prices if lending was severely restricted, maybe then the value would actually be affordable and not a lifelong debt that becomes unservi…

saving money

because we're all keynesians now, saving is now evil.

Re: Croatia just canceled the debts of its poorest citizens

#45

Post by popee »

Hi, croat here. Just one detail, this year there will be elections in Croatia and current gov didn't do anything useful for our economy, so this is kind of popular measure. Don't get me wrong, it's always nice to help, but situation is little bit complicated, taxes are very high and in some way this is not fair to people that are paying everything. Also, there are huge number of people living and exploiting social measures, so ... In this context it's impossible to help those who really need help.

You know what is the saddest part? Opposition party (conservatives that ruled from 2007-2011) is convicted for criminality and they are atm most popular, so for common and independent people there is no light at the end of the tunnel. If someone can solve this chaos he/she will be candidate for Nobel's price.

P.S. Sorry on bad english

Re: Croatia just canceled the debts of its poorest citizens

#46

Post by chris_wot »

zanny wrote: post #36
raverbashing wrote: post #32

Earlier quoted context omitted.

"if you have enough money after you pay the bills etc. to put aside." And how do you expect to afford a loan if you don't have money to put aside?! (excluding the rent to mortgage case, obviously)

The greatest boon of credit is the generation of new businesses. IE, you fund a venture through a loan, which upon its success becomes a thriving business. Beforehand, you could not save or afford the cost of the loan. Afterwards, you will make more than enough to pay it back. Which is also the implicit risk credit is meant to impose on financers, which is why most countries have regulatory bodies that try to incenti…

I'm not sure how this relates to the previous comment.

Re: Croatia just canceled the debts of its poorest citizens

#48

Post by Frondo »

failed_ideas wrote: post #42
failed_ideas wrote: post #4

In part, I love this idea. However, as someone who struggles with debt, I've worked to the point of causing serious health issues just to keep my head above water, so if Canada were to do this, I'd be more than ticked. The slacker next to me gets a clean slate, and I get an early grave.

Just to respond to all at once, I'm looking for fairness here, not to punish those that couldn't pay debts. There isn't anything 'bad' about not being able to manage debt in and of itself. However, if you took 3 jobs to make ends meet and the neighbour simply took a third mortgage and smoked pot all day on pogey, it isn't fair. And this action doesn't install any sense of responsibility. All this does is encourage th…

There are much bigger things that aren't "fair" to be judgmental about than your neighbour on pogey.

If you want to worry about other people ripping off society in some way, it might be a good idea to worry about the people who are pulling the big cons, not the hypothetical lazy neighbour.

Re: Croatia just canceled the debts of its poorest citizens

#49

Post by sgift »

failed_ideas wrote: post #42
failed_ideas wrote: post #4

In part, I love this idea. However, as someone who struggles with debt, I've worked to the point of causing serious health issues just to keep my head above water, so if Canada were to do this, I'd be more than ticked. The slacker next to me gets a clean slate, and I get an early grave.

Just to respond to all at once, I'm looking for fairness here, not to punish those that couldn't pay debts. There isn't anything 'bad' about not being able to manage debt in and of itself. However, if you took 3 jobs to make ends meet and the neighbour simply took a third mortgage and smoked pot all day on pogey, it isn't fair. And this action doesn't install any sense of responsibility. All this does is encourage th…

You somehow seem to equate debt with guilt. That is not what debt is, although lenders love it when you believe that. You also seem to think that the main reason people cannot pay of their debt is that they "smoked pot all day" - the notion of debt as guilt shines through here again. Debt is debt. Nothing else. It is not some moral failing if you cannot pay it back, it can have many reasons. And the idea that just because you thought it would be the right thing to do to put yourself in for an early grave by working so hard that your body breaks down everyone who didn't do that is a slacker, not "committed" enough or whatever is very sad.

Re: Croatia just canceled the debts of its poorest citizens

#50

Post by zb »

A similar act occurred as part of what may now be regarded as the foundation of Western democracy:

https://en.m.wikipedia.org/wiki/Seisachtheia

was a regular feature of the ancient world:

https://en.m.wikipedia.org/wiki/Jubilee_(Biblical)

and occurs on a smaller scale in our own society on a daily basis:

https://en.m.wikipedia.org/wiki/Bankruptcy

So if we ask a so-called expert on the subject, what will he say?

Among economists, the scheme is regarded as unprecedented and exceptional. "I can't think of anything comparable," Dean Baker, co-director of the Washington-based Center for Economic and Policy Research, told The Washington Post.

Of course he's against it anyway.

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