Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Croatia just canceled the debts of its poorest citizens

washingtonpost.com

Post reply on HN
Print view View original

291–300 of 307 posts

Re: Croatia just canceled the debts of its poorest citizens

#291

Post by rlucas »

calinet6 wrote: post #281
radisb wrote: post #272

Earlier quoted context omitted.

3 years ago, in Cyprus, the reverse happened (savings were cut off) but people still deposit money into their bank accounts without getting increased interest, despite this precedent. Why should a loan writing off cause loan interests to go up?

Exactly because the situation is reversed: the banks are much more likely to be strategic and self preserving than the general public, due to concentration of power and many other factors.

This. Good comment highlighting a super important insight: freshman Ec 10 thinking does not universally apply across all kinds of economic actors.

In trying to apprehend reality as closely as feasible, it will not do to make assumptions like "all actors have constant (or even he same lognormal function describing) marginal utility" or "ignoring transaction costs and taxes."

This is most crucial in understanding behavior in vastly asymmetric situations (e.g. A Croatian making $100 a month vs a bank). Of course, much of our consumer tech industry is founded on this sort of asymmetry, so the concept is not out of reach; yet, we of the technical mindset often are too quick to use the lens of a convenient simplifying abstraction when it comes to political questions of economic incentives...

Re: Croatia just canceled the debts of its poorest citizens

#292

Post by crpatino »

bjt wrote: post #220
ricardobeat wrote: post #177

Earlier quoted context omitted.

These exact same words could come out of a Brazilian. Word by word. I don't know about Croatia, but in that case they are only half-truths. The idea that there are 'people who pay for everything' is usually misguided. There are the exploited, and the less exploited. Both pay in one way or another, and only a very small elite group is actually well off. You say "the situation is complicated" and "this is not fair", bu…

The obvious possible failure is that these people may find it hard to get credit in the future, as described in the last paragraph: > Some economists, among them Baker, are skeptical whether the scheme will succeed: "I am not sure that this is the best way to help low-income people. If lenders think this can happen again they will charge very high interest rates to low-income borrowers," Baker said. If you were a ban…

While I read tones of rayndianism in Baker's statement (we'd like to help poor people, but without giving them money or incurring in any actual cost ourselves) the statement is factually correct.

Even if we have not had any such bailouts for the underclasses in Mexico, delinquency rates for all sort of credit are so high that the banks have accepted this as the cost of doing business, and passed those costs to the subset of customers that actually care about paying off debt. This is how I still pay ~30% on my credit card after 20 years of solid credit history with the same bank - entry level ones charge ~50%!!! Or how a few years ago there was this brilliant advertising campaign for "the first single-digit mortgage in market" (9.97% or so).

Re: Croatia just canceled the debts of its poorest citizens

#293

Post by alienasa »

nathan_f77 wrote: post #236

This is a beautiful idea. Straight from the Bible, too [1]. But I wonder how many citizens are right on the edge of these limits? That would really suck if you had a monthly income only slightly higher than 1,250 kuna. Also, if you have 40,000 kuna in debt, is the first 35,000 wiped out? Or none at all, because you're over the limit? > They cannot have any other property or savings. What if you have 2,000 kuna in sav…

> What if you have 2,000 kuna in savings, but you're still 37,000 kuna in debt?

This is directly translatable to being 35,000 kuna in debt. You can't ignore savings when determining ability to pay debt.

Re: Croatia just canceled the debts of its poorest citizens

#294

Post by intopieces »

adventured wrote: post #185
ptaipale wrote: post #162

Earlier quoted context omitted.

You are right, but in comparison to European countries, U.S. taxes are low. There's only one European country (Lithuania) where tax per GDP is clearly lower than U.S. E.g. in Scandinavia, the horrors of U.S. are attributed to its "extremy low" tax status. Horrors like that rich people only live in compounds surrounded by walls and armed guards, and the poor are dying because of no health care and no food, and the mid…

What are you talking about? "Horrors like that rich people only live in compounds surrounded by walls and armed guards, and the poor are dying because of no health care and no food, and the middle class does not exist." The poor have essentially universal free healthcare in the US and have for a long time. I should know, I've used it before, and it's very easy to use. The poor also have the benefit of the one of the…

>A mere 1% of US labor earns the minimum wage Would you mind citing your source for this? It seems to me you could claim anyone making ≥$7.26 per hour - even part time workers - as "not earning minimum wage," a metric that is not particularly encouraging given the cost of living exceeds even the earnings of a person making that for 40 hours a week in most places - nevermind that people making around this wage are often kept below the number of hours that triggers mandated benefits.

Re: Croatia just canceled the debts of its poorest citizens

#296

Post by dang »

juliangregorian wrote: post #243
mikerichards wrote: post #237

Earlier quoted context omitted.

Do you communists even listen to yourselves? He never said he was a libertarian. And where the hell do you get this "hustling sketchy shit" from? Do us a favor and reply to the comment, not whatever your mind twisted it into.

Butthurt libertarian detected. Sexual arousal at thought of drinking from bacteria-laden water balloons probable.

> Butthurt libertarian detected

This violates the HN guidelines and I'm afraid some of your other comments have as well. Please re-read the site rules and try harder to follow them:

https://news.ycombinator.com/newsguidelines.html

https://news.ycombinator.com/newswelcome.html

https://news.ycombinator.com/newsfaq.html

Re: Croatia just canceled the debts of its poorest citizens

#297

Post by dang »

mikerichards wrote: post #237
juliangregorian wrote: post #207

Earlier quoted context omitted.

Do you libertarians even listen to yourselves? The amount of disease that would spread... "hustling sketchy shit" is not a sustainable model of entrepreneurship.

Do you communists even listen to yourselves? He never said he was a libertarian. And where the hell do you get this "hustling sketchy shit" from? Do us a favor and reply to the comment, not whatever your mind twisted it into.

> Do you communists even listen to yourselves?

> And where the hell do you get this

> Do us a favor

> whatever your mind twisted it into

All of this violates the HN guidelines. Please re-read the site rules and try harder to follow them:

https://news.ycombinator.com/newsguidelines.html

https://news.ycombinator.com/newswelcome.html

https://news.ycombinator.com/newsfaq.html

Re: Croatia just canceled the debts of its poorest citizens

#298

Post by [deleted] »

zo1 wrote: post #254
juliangregorian wrote: post #207

Earlier quoted context omitted.

Do you libertarians even listen to yourselves? The amount of disease that would spread... "hustling sketchy shit" is not a sustainable model of entrepreneurship.

I'm not a libertarian, I'm an anarcho-capitalist, thanks. And I'm all ears if you have some valid, debate inducing criticism. Though, I'd appreciate it if you kept it civil, as others have already asked you.

[deleted]

Re: Croatia just canceled the debts of its poorest citizens

#299

Post by ptaipale »

velcro wrote: post #290
ptaipale wrote: post #145

Earlier quoted context omitted.

Just nitpicking one thing: > taxes are very high Doesn't seem so: Croatia's tax to GDP ratio is 26.6 %. Compare that to 46.8 % in Belgium, 43.4 % in Austria, 40.6 % in Germany, 45.8 % in Sweden. 26.9 % in U.S. which is internationally known as a low-tax regime. Surely some taxes are high, and taxation is not necessarily fair, but I'd say that Croatia's taxes overall are not high. I would also expect that the "black m…

Taxes really are quite high - not sure how good of an indicator for this is tax to GDP ratio though. A lot of the people frequenting HN are (usually) well off IT workers - so I find the following list quite telling - it shows an effective income tax and social security rates on USD $100,000 of gross income (based on KPMG 2012 global tax rate survey): http://imgur.com/MUZlz

This is informative, even though we should remember that comparisons can be very difficult across different systems (for instance, does our IT worker have a spouse and children, and is there a child deduction in taxation, and what else there is in childrens' services and benefits).

Usually different comparisons concentrate on "average" workers, i.e. lower income.

Re: Croatia just canceled the debts of its poorest citizens

#300

Post by lifeformed »

gnoway wrote: post #119
lifeformed wrote: post #118

Earlier quoted context omitted.

Unless I'm reading this wrong, isn't this good for banks? The gov't is paying the debts, not just declaring them gone. The banks get everything back.

No. The article points out that the lenders will not be reimbursed.

What's the $31-300M cost going towards then?
Post reply on HN