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The People's Bailout

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Re: The People's Bailout

#91

Post by philwelch »

narcissus wrote: post #28
marknutter wrote: post #19

How does OWS think this debt accumulated? Debt isn't some random accident like getting hit by a car while crossing the street. You have to get yourself into debt. It used to be taboo, but it's acceptable to get into debt these days and worse yet, walk away from it. OWS, to me, represents an entitled generation.

"Debt isn't some random accident like getting hit by a car while crossing the street." Except debt can be exactly due to some random accident like getting hit by a car while crossing the street and you don't have the insurance to pay for the medical bills. I'm not saying that this is true for all of the OWS debts: probably not even the majority. I'm just saying that it's not as easy as "it's your fault you're in debt…

If you get hit by a car, by law, the driver of that car should have liability insurance which will end up paying all your medical bills.

Re: The People's Bailout

#92

Post by corkill »

Actual wall street gets bailed out by government (taxpayers).

OWS wants taxpayers to voluntarily bailout private individuals.

I understand the human side of it, helping relieve people of debt seems like a noble cause. But the economics of it seem so warped to me, can someone explain why allocating money to forgive private debt is a good thing economically?

Re: The People's Bailout

#93

Post by RyJones »

philwelch wrote: post #89
RollingJubilee wrote: post #74

Earlier quoted context omitted.

Hi everyone. I want to assure you all that we are aware of the tax implications. We are working with a pro-bono tax lawyer and have called the IRS several times. The IRS informed us that we do not meet the requirements to file a 1099-c (we are not a bank, credit union, etc.) Our tax lawyer has written some technical langue for our website. The bottom line is that we will be purchasing debt of people who are most like…

If these people are insolvent, why can't they just declare bankruptcy?

it's expensive and means-tested. You don't get to keep everything, even if everything doesn't amount to much.

Re: The People's Bailout

#94

Post by dmix »

subsection1h wrote: post #68
marknutter wrote: post #19

How does OWS think this debt accumulated? Debt isn't some random accident like getting hit by a car while crossing the street. You have to get yourself into debt. It used to be taboo, but it's acceptable to get into debt these days and worse yet, walk away from it. OWS, to me, represents an entitled generation.

Debt isn't some random accident like getting hit by a car while crossing the street. The leading cause of personal bankruptcy is medical expenses. So yeah, debt can be some random accident like getting hit by a car. OWS, to me, represents an entitled generation. Which post-WW2 generation can't be described as an entitled generation?

The issue is using "generation". There's always been an entitiled subset of each generation. The question has it grown and are they more vocal?

Re: The People's Bailout

#95

Post by sc68cal »

tsotha wrote: post #56
narcissus wrote: post #28

Earlier quoted context omitted.

"Debt isn't some random accident like getting hit by a car while crossing the street." Except debt can be exactly due to some random accident like getting hit by a car while crossing the street and you don't have the insurance to pay for the medical bills. I'm not saying that this is true for all of the OWS debts: probably not even the majority. I'm just saying that it's not as easy as "it's your fault you're in debt…

>Except debt can be exactly due to some random accident like getting hit by a car while crossing the street and you don't have the insurance to pay for the medical bills. That's why we have bankruptcy laws. From what I heard at the time, the big hobby horse for the OWS people was student debt, which can't be forgiven in bankruptcy. And that kind of debt is entirely optional.

    That's why we have bankruptcy laws.
Yes - bankruptcy laws that were passed in 2005 which made it significantly harder to get debt forgiven in bankruptcy, and also removed some forms of debt from being able to be discharged in bankruptcy: https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_an...

    It was widely claimed by advocates of BAPCPA that its 
    passage would reduce losses to creditors such as credit
    card companies, and that those creditors would then pass
    on the savings to other borrowers in the form of lower 
    interest rates. These claims turned out to be false.
    After BAPCPA passed, although credit card company 
    losses decreased, prices charged to customers 
    increased, and credit card company profits soared.
http://ssrn.com/abstract=1157158

    And that kind of debt is entirely optional.
Not when the majority of jobs that create a vibrant middle class in the post-industrial United States require at least a college degree.

Re: The People's Bailout

#96

Post by potatolicious »

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 inhumane and downright barbaric health care system.

Re: The People's Bailout

#97

Post by bobwaycott »

tsotha wrote: post #56
narcissus wrote: post #28

Earlier quoted context omitted.

"Debt isn't some random accident like getting hit by a car while crossing the street." Except debt can be exactly due to some random accident like getting hit by a car while crossing the street and you don't have the insurance to pay for the medical bills. I'm not saying that this is true for all of the OWS debts: probably not even the majority. I'm just saying that it's not as easy as "it's your fault you're in debt…

>Except debt can be exactly due to some random accident like getting hit by a car while crossing the street and you don't have the insurance to pay for the medical bills. That's why we have bankruptcy laws. From what I heard at the time, the big hobby horse for the OWS people was student debt, which can't be forgiven in bankruptcy. And that kind of debt is entirely optional.

While I'm not entirely disagreeing with your point, there is an element of dubious optionality wrt student debt when one systemically cannot find gainful employment without a college degree. College degrees are increasingly becoming the new high school diplomas—wherein they are, for all intents and purposes, of equal compulsory nature, without the defense of laws requiring all 18-21-year-olds to be there. Thus, for vast majorities of the population who wish to lead productive economic lives, the "option" isn't quite optional anymore.

Re: The People's Bailout

#98

Post by azakai »

philwelch wrote: post #91
narcissus wrote: post #28

Earlier quoted context omitted.

"Debt isn't some random accident like getting hit by a car while crossing the street." Except debt can be exactly due to some random accident like getting hit by a car while crossing the street and you don't have the insurance to pay for the medical bills. I'm not saying that this is true for all of the OWS debts: probably not even the majority. I'm just saying that it's not as easy as "it's your fault you're in debt…

If you get hit by a car, by law, the driver of that car should have liability insurance which will end up paying all your medical bills.

Should, but not necessarily. People buy insurance for exactly that case, where the other motorist is uninsured or underinsured.

Re: The People's Bailout

#99

Post by frio »

philwelch wrote: post #91
narcissus wrote: post #28

Earlier quoted context omitted.

"Debt isn't some random accident like getting hit by a car while crossing the street." Except debt can be exactly due to some random accident like getting hit by a car while crossing the street and you don't have the insurance to pay for the medical bills. I'm not saying that this is true for all of the OWS debts: probably not even the majority. I'm just saying that it's not as easy as "it's your fault you're in debt…

If you get hit by a car, by law, the driver of that car should have liability insurance which will end up paying all your medical bills.

So what if the shoe's on the other foot? A driver hits someone. The driver doesn't have insurance. He's now liable for the other person's medical bills, but can't afford them. He's now massively in debt over some random accident.

No matter the moral judgment ("he shouldn't be driving without insurance"), the underlying point was that random debt does happen :).

Re: The People's Bailout

#100

Post by scythe »

patio11 wrote: post #25

For the benefit of folks who might not understand how debt collection works, which may include OWS: if you buy $10,000 of an individual's debt for $500 and then forgive the debt, they have just incurred income of $10,000 and are obligated to pay taxes on it exactly as if you had handed them $10,000 in cash for services rendered. If you don't inform the IRS that you forgave the debt, via a 1099-C, you're going to get…

Fifth paragraph:

>Now, after many consultations with attorneys, the IRS, and our moles in the debt-brokerage world...

I'm guessing they know what they're doing.

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