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Let& #39;s talk about debt forgiveness, and why it& #39;s hard.
Since this is a popular topic these days.
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Since this is a popular topic these days.
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But first let& #39;s talk about when it wasn& #39;t hard.
Back in the day, when the Lords and Ladies owned everything, they would lend money as a way of extracting rent from everyone.
Periodically, this got a little too top heavy and everyone got angry.
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Back in the day, when the Lords and Ladies owned everything, they would lend money as a way of extracting rent from everyone.
Periodically, this got a little too top heavy and everyone got angry.
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And so the Ladies and Lords, having calculated that they enjoyed having their heads attached to their bodies, would do a Debt Jubilee.
After all - they still owned everything, so it was just a temporary loss of income.
And they kept their heads.
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After all - they still owned everything, so it was just a temporary loss of income.
And they kept their heads.
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But that& #39;s not quite how debt works anymore. You see - debt isn& #39;t just simplistic rent seeking anymore (note: it still kind of is this, it& #39;s just not *just* this).
Today, debt is an asset. And we are the rent seekers.
What does that mean "we are the rent seekers?"
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Today, debt is an asset. And we are the rent seekers.
What does that mean "we are the rent seekers?"
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Well in our representative government, we are the Lords and Ladies. Rent seeking isn& #39;t kingdoms and peasants anymore.
It& #39;s pensions. It& #39;s 401(k)s. It& #39;s your Target Date 2047 fund.
We are the rent seekers, renting ourselves to ourselves.
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It& #39;s pensions. It& #39;s 401(k)s. It& #39;s your Target Date 2047 fund.
We are the rent seekers, renting ourselves to ourselves.
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And debt is an asset now - an asset held by those pensions and institutions and target date funds.
So if we "forgive" it, like... what does that mean? Who gets hit?
While it& #39;s fanciful to think it might be Wall St. that& #39;s more or less wrong.
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So if we "forgive" it, like... what does that mean? Who gets hit?
While it& #39;s fanciful to think it might be Wall St. that& #39;s more or less wrong.
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No - Wall St. are no Ladies and Lords, they are simple merchants. They take our debt from us, package it up (for a fee!), and then sell it back to us.
They are temporal arbitrageurs, not likely to get hit overly hard by a Jubilee.
Sadly, there is no great villain here.
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They are temporal arbitrageurs, not likely to get hit overly hard by a Jubilee.
Sadly, there is no great villain here.
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Or rather: "we have met the enemy, and it is us."
Awkwardly... if We The People want to do a debt jubilee, then We The People are also going to get hit by an asset write down, because We The People are holding that debt as assets.
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Awkwardly... if We The People want to do a debt jubilee, then We The People are also going to get hit by an asset write down, because We The People are holding that debt as assets.
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Now of course there& #39;s some detail here around who owns what forms of debt and who would take the hit and all that, but ask yourself: who do you think will see this coming and duck -- the Big People or the Little People?
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