Is "debt forgiveness" an alien idea?

[kentuck]

"The Constitution of the United States," Article 1, Section 8:

"The Congress shall have power...To establish a uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States..."

From Wikipedia:

Debt relief is the partial or total forgiveness of debt, or the slowing or stopping of debt growth, owed by individuals, corporations, or nations. From antiquity through the 19th century, it refers to domestic debts, in particular agricultural debts and freeing of debt slaves. In the late 20th century, it came to refer primarily to Third World debt, which started exploding with the Latin American debt crisis (Mexico 1982, etc.). In the early 21st century, it is of increased applicability to individuals in developed countries, due to credit bubbles and housing bubbles.

From the Bible: Deuteronomy 1-11

The Year for Canceling Debts

1At the end of every seven years you must cancel debts. 2This is how it is to be done: Every creditor shall cancel the loan he has made to his fellow Israelite. He shall not require payment from his fellow Israelite or brother, because the Lord’s time for canceling debts has been proclaimed. 3You may require payment from a foreigner, but you must cancel any debt your brother owes you. 4However, there should be no poor among you, for in the land the Lord your God is giving you to possess as your inheritance, he will richly bless you, 5if only you fully obey the Lord your God and are careful to follow all these commands I am giving you today. 6For the Lord your God will bless you as he has promised, and you will lend to many nations but will borrow from none. You will rule over many nations but none will rule over you.

7If there is a poor man among your brothers in any of the towns of the land that the Lord your God is giving you, do not be hardhearted or tightfisted toward your poor brother. 8Rather be openhanded and freely lend him whatever he needs. 9Be careful not to harbor this wicked thought: “The seventh year, the year for canceling debts, is near,” so that you do not show ill will toward your needy brother and give him nothing. He may then appeal to the Lord against you, and you will be found guilty of sin. 10Give generously to him and do so without a grudging heart; then because of this the Lord your God will bless you in all your work and in everything you put your hand to. 11There will always be poor people in the land. Therefore I command you to be openhanded toward your brothers and toward the poor and needy in your

[pipoman]

1. How much of your money would you

be willing to loan if you knew you could take it in the shorts at the whim of government? How much interest would you charge to make up for a policy such as this? I'm thinking it would become impossible for all but the most wealthy to borrow money for anything. Bankruptcy isn't easy, nor should it be...there is that option however for extreme cases...so it isn't an alien idea.

[kentuck]

2. None.

I would put it all in a big barrel and save it until my fingernails grew long...

[Occulus]

3. The key word there is "willing".

I don't care if banksters are willing to loan money or not. The law should require them to offer loans, at their risk, regardless of debt forgiveness.

If they don't want to do that, too bad, don't go into business. If we decided to offer debt forgiveness and they didn't want to continue to offer loans- at a reasonable rate set by the government, not them- we could revoke their charters and shut them down. Simple, and no, I do not care what happens to them or those who serve them. But we have to do it. One or two very public and very large examples would serve to make the point.

We've never done this before, mostly because our corporate masters would scream to high heaven about how "unfair" it is. My answer is, so what? But more to the point, it isn't fair that a person who gets sick should end up hundreds of thousands of dollars in debt. It isn't fair that a person seeking an education should graduate with a six-figure bill in their hands. It isn't fair that a person should lose their home to a corporation that can't live in it. It isn't fair that a person should lose their job, their home, and be unable to pay their student loan and/or medical bills because a corporation shipped their work overseas.

Yet look at what they have done to us. Corporate wrongdoing, largely related to what we "owe" them, has very nearly broken the back of our nation's economy several times over throughout the past three decades. Corporate powers have proven, conclusively, that they cannot be trusted, ever. Yet we for some reason continue shoveling them money, continue bailing them out, continue bowing to them, continue to give them second and third and fourth and fifth chances to do "right" by us, when they very clearly do not and never will have any intention of doing so.

We shouldn't be "fair" to corporations- including those who offer loans- for the very simple reason that they are not "fair" to us.

What we are really talking about here, and what was obviously recognized even in Biblical times, is the difference between immortal, faceless, bodiless legal entities called corporations vs. mortal, embodied, real human beings. Corporations are there to serve us, not the other way around. The answer to all of the above, and a very great many of the other greatest and most damaging ills from which our nation and its people suffer, is to revoke all corporate rights- collectively called the doctrine of "corporate personhood"- and relegate those things we call "rights" for humans to the realm of privilege for corporations. This includes all those things we call "rights" under the Bill of Rights and the rest of the Constitution.

Corporations should have no "rights" because they are not alive. This includes the "right" to collect debt in perpetuity.

[badtoworse]

5. What you're describing sounds like Marxism to me. I'll stick with what we have.

Corporations don't exist to "serve us". They exist to make money for their shareholders and always have.

[Occulus]

6. They make money for their shareholders by serving us

with goods and services.

Here's a question: how do you send a bank to jail when it literally steals a house?

[badtoworse]

10. If you state the facts of the case, I'll give you my opinion

Foreclosing on a mortgage that is in default is not stealing.

You are correct that corporations make money by serving us is correct, however, the choice of what services they offer and the terms under which they offer them is generally theirs. A corporation that does not offer a satisfactory product generally does not survive for very long.

Banks are subject to regulation, but saying they have to make loans at reasonable rates regardless of the risk is way over the line - I would call that a taking and violative of the 5th Amendment.

[LuvNewcastle]

7. +1

Helping out people in need should be the price of doing business in this country.

[coalition_unwilling]

9. Speaking of 'fair,' how fair is it that 400 American families control as much wealth between them

as the bottom 150 MILLION Americans?????

Bravo! for your post. I hope you will consider fashioning it into an OP. I would be proud to rec and respond to same.

[pipoman]

11. The fault of the "housing bubble"

is firmly on the shoulders of the rethugs...and the Dems.

In a nut shell..The Republicans had asked for, many times, deregulation of financial institutions and to raise the lending limits for banks. The Clinton administration/Democrats wanted to reduce lower statutory lending guidelines to give people in lower income brackets the ability to qualify for mortgages. So the compromise was to do all three things..They set the bomb and it ticked along for 15+ years, then it exploded.

In the 1980's if you wanted to buy a home and had good credit, you could buy a home if you had 10% down(20% for fair credit and 5% for stellar credit), could not be borrowed or gifted unless the money was in the borrower's account for a year. The payment (PITI) could not exceed 25% (IIRC) (and the PITI and all other debt could not exceed 35%) of your gross income.

People would reduce their debt and save up, they would buy a fixer-upper keep it for 5 years, take their equity and buy up.

Fast forward to the 2000's...HGTV has a show about first time home buyers called "Property Virgins". It was all about kids who just graduated with their teaching certificate, driving new cars, who go out and buy new homes valued at 3 times their salary with no money down and 110% financing so at closing they didn't pay a dime and they actually received a check for enough to buy wall-to-wall new furniture. "I just can't live without a bidet and a chef's kitchen.." they would cry! A train wreck I would tell my wife..It's like watching a train wreck..

The fact is that the depositors of the bank and the share holders would take it in the shorts with your ideas. That means granny's liquid retirement and the stocks her pension is invested in.

[bhikkhu]

12. Balance could certainly be better, but corporations are nothing but people

...acting together as an entity. Employees and owners together acting to serve customers, as a functional unit of the marketplace. We are all free to "vote" with our dollars every day, "electing" those that serve us best. Its easy to go too far with that, but its best to remember that corporations exist because we choose for them to exist, and if we chose otherwise they would cease to exist almost immediately.

[Igel]

4. Different kind of society.

1. People didn't borrow unless it was to survive. First you'd sell land and other real property. You'd try to find work. Only then did you take out a loan.

That money you borrowed was a downpayment on your body and family, if you didn't pay it back quickly enough. Just as you can have your house foreclosed on and sold off to cover the debt, you (and your family) could be "foreclosed on" and sold off to cover the debt. Unless you were all but guaranteed a revenue stream sufficient to cover the payback you'd never take out a loan for expanding your business, much less a luxury. A nicer house is a luxury. Getting a car so you don't have to walk 90 minutes a day one way to work is a luxury.

It wasn't a coincidence that the year of release was from both debt and from debt-induced slavery, as well as (officially, at least) signalling a return of arable land and pasture to its hereditary owners.

2. Small-scale. Most of society wasn't wealthy. Loans wouldn't be for a huge amount.

3. Loans were local, your life was local. Few wandered from city to city or moved from area to area. You depended on your family, clan, and tribe. To be a "stranger" was to be as isolated as a Zapotec monolingual would be in downtown Waco, TX. With the exception that few laws would provide him with anything: No police, no social services, no homeless shelters, no requirement to get a translator. "I'll migrate and hope to get a job" was an insane proposition. So if you borrowed, you weren't going anywhere. The threat of short-term slavery was far better than the possibility of running to a different town.

[FarCenter]

8. Bankruptcy is the method for obtaining forgiveness of debt

http://en.wikipedia.org/wiki/Bankruptcy#United_States

In bankruptcy the court determines the facts regarding the person's debts and assets, and either discharges claims against the debtor or arranges for a schedule of partial payment.