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An idea about the nation's debt...

 
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Post An idea about the nation's debt... Aaron Scott
Some of the ideas being forwarded by the Democrats (e.g., debt cancellation of school loans, etc.) hark back to notions about Jubilee.

In our current world, I don't know that we will ever get to the place where we cancel debt on a broad scale. After all, if a doctor has their school loans cancelled, the blue collar workers are going to complain that the doctor, making far mare money, got a free ride, while the blue collar workers, who are just as much in need of debt relief, got nothing.

BUT WHAT IF....

It came to me that what if we did one of two things (or both): we just had an across the board debt PAUSE for say three months? You don't owe anything extra. You simply don't have to pay anything for, say, March. You then get back to paying your bills in April, but your amortization is just extended by a month.

OR...

Or a debt CANCELLATION of, say, one or two months? That is, you NEVER have to pay that part back.

Creditors are issued the same opportunity. That is, they don't have to pay THEIR creditors for those months, either.

Would this be of benefit? If not, why not?

Lastly, what if we America not only extended that to our foreign debtors, but at the same time, took a pause from paying our own debts?

It seems to me that if EVERYONE is being given the same deal, we are not doing any lasting or dramatic damage to anyone. Consider a poor country that is struggling to stay solvent. It gets this pause to catch their breath (or to not pay at all). Might we not see some sort of significant benefit from this in the world economy?
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1/19/20 1:48 pm


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Post Cojak
NOW, all we have to do is get ENOUGH people/countries/governments to simply agree. LOL

Humans are strange , especially many USA people. I once had a home paid off. I was going to be out of the country for a couple years or more. We allowed a couple who were strapped with rent payments to live in the home and just pay utilities. At the end of over 2 years, they had not saved $1. I was amazed. They had more debt than they had before and lost some things because they could not pay rent each month after years of FREE rent. In the beginning they said they would save and have a down payment on a house. Instead they went deeper in debt. That is a TRUE story with a sad ending. Both had good jobs.
There was actually a little complaining that they had only 6 months to find a rental, we were returning.

For some reason we have people and churches the same.....

But yes it would benefit many......
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1/19/20 2:31 pm


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Post diakoneo
Cojak wrote:
NOW, all we have to do is get ENOUGH people/countries/governments to simply agree. LOL

Humans are strange , especially many USA people. I once had a home paid off. I was going to be out of the country for a couple years or more. We allowed a couple who were strapped with rent payments to live in the home and just pay utilities. At the end of over 2 years, they had not saved $1. I was amazed. They had more debt than they had before and lost some things because they could not pay rent each month after years of FREE rent. In the beginning they said they would save and have a down payment on a house. Instead they went deeper in debt. That is a TRUE story with a sad ending. Both had good jobs.
There was actually a little complaining that they had only 6 months to find a rental, we were returning.

For some reason we have people and churches the same.....

But yes it would benefit many......


Discipline is the key to debt demolition Alfred E. Neuman
I did debt consolidation twice and wound up in a mess both times. Until people get a handle on their finances and learn to make money work for them, there is no amount of debt forgiveness or fancy finagling that will. Discipline is the key.
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1/20/20 8:46 pm


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Post Cojak
diakoneo wrote:
...
Discipline is the key to debt demolition Alfred E. Neuman
I did debt consolidation twice and wound up in a mess both times. Until people get a handle on their finances and learn to make money work for them, there is no amount of debt forgiveness or fancy finagling that will. Discipline is the key.


You are correct about discipline. Money management is a lot like diet, alcohol, drugs and smoking, THE management of it, ain't easy. Shocked
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1/21/20 11:09 am


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Post Link
In Israel, debt cancellation was set up as a part of the law before they went into the land and started using the land. Their financial decisions could take it into account.

What would happen if the US suddenly decided to do this? Probably:

- US T-Bills and other instruments would drop in value, not just in proportion to the lack of revenue in year seven, but due to a lack of confidence because in the sudden change in the rules.
- The value of the dollar and US assets would drop in the world market.
- Some serious economic ramifications because of the previous two points.
- Many individuals, including land owners, who live off of the payments that are cancelled would be poor, stand in line at the food back, go bankrupt, etc.
- Many REITs and other corporations that collect rents would go bankrupt.
- The value of the stocks of companies in the previous point would drop, affecting retirees and others that depend on them.
- Lending would drop to low levels.
- Our current economic system could unravel.
- There could be an economic crisis worse than the great depression.
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1/21/20 11:22 am


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Post Great idea roughridercog
They can sell fried pies Laughing
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1/21/20 1:08 pm


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Post Aaron Scott
Link wrote:
In Israel, debt cancellation was set up as a part of the law before they went into the land and started using the land. Their financial decisions could take it into account.

What would happen if the US suddenly decided to do this? Probably:

- US T-Bills and other instruments would drop in value, not just in proportion to the lack of revenue in year seven, but due to a lack of confidence because in the sudden change in the rules.
- The value of the dollar and US assets would drop in the world market.
- Some serious economic ramifications because of the previous two points.
- Many individuals, including land owners, who live off of the payments that are cancelled would be poor, stand in line at the food back, go bankrupt, etc.
- Many REITs and other corporations that collect rents would go bankrupt.
- The value of the stocks of companies in the previous point would drop, affecting retirees and others that depend on them.
- Lending would drop to low levels.
- Our current economic system could unravel.
- There could be an economic crisis worse than the great depression.



LINK, why would a PAUSE do this?

Consider that if a creditor is relying on payment of a debt in order to repay his OWN debt, well, he also is paused. So it would seem that it would be a wash.

As for the discipline aspect, ABSOLUTELY CORRECT. There are people that you can could completely cancel their debt...and they'd be back in debt before long.

BUT there are people who, if given a breathing spell, would use it wisely. They would perhaps be able to set aside money for saving, etc.

One of the things I notice in myself is that I am someone who looks for magic bullets and one-stop solutions. So, the notion of saving, say, $10 every payday for 30 years...NOPE. But when I have the chance to save, say, $1000, yeah, that's something with a more noticeable impact on my bottom line, so I would do that.

I imagine that many other folks would act similarly. Yes, they might eventually get in a tight spot in the future, but they also might not.
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1/22/20 3:14 pm


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Post Dave Dorsey
Do employers get to pause their payment of the debt (wages) they owe to their employees? Now 67% friendlier!
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1/23/20 9:31 am


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Post Cojak
Dave Dorsey wrote:
Do employers get to pause their payment of the debt (wages) they owe to their employees?


Shucks no! Shocked
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1/23/20 10:09 am


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Post Dave Dorsey
Cojak wrote:
Shucks no! Shocked

That's gonna be a problem then, especially if all of the people who owe the employer money are taking a 3 month break from paying him. Very Happy
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1/23/20 10:52 am


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Post Dave... Aaron Scott
Dave Dorsey wrote:
Do employers get to pause their payment of the debt (wages) they owe to their employees?



That's a fair question. It does cause me to give more consideration to what I meant. I was thinking in terms of installment debt.
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1/23/20 3:53 pm


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Post Dave...further.... Aaron Scott
I have heard people tell others to "pay yourself first." I agree. And it has to do with something you said....

I believe that we owe a DEBT to our family. A wife and children are looking to the father (or breadwinner/s) for things such as food, a future, an education, vacations, etc.

Now, this does not give someone the right, I don't think, to spend extravagantly, while ignoring other legit debt. But one's debt to one's family IS legit debt, and so should not be set aside to pay every other bill before paying that one.

Yes, there are some bills you MUST pay in order to take care of your family (e.g, mortgage/rent, utilities, and the such). And if you CAN pay all other debts while taking care of your family's legit needs/debt, do it. But if not, then some debts are of lower priority than one's debt to one's family (e.g., credit card debt, other debts that can perhaps be negotiated lower, etc.)

Just my thinking.
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1/23/20 3:58 pm


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Post Link
Aaron Scott wrote:

LINK, why would a PAUSE do this?

Consider that if a creditor is relying on payment of a debt in order to repay his OWN debt, well, he also is paused. So it would seem that it would be a wash.


If your landlord has a mortgage and pays it with your rent, and it's a wash for the landlord, then giving both you and him a break may work out in that case. But what if your landlord paid the mortgage and depends on your rent check to buy food?

If you exclude rents from 'debt', then apply it to an owner financed mortgage, which would be debt.

If your rent ultimately goes to a publicly traded corporation, some grandma or grandpa out there is probably invested in dividend-paying stocks, which could include REITs and companies that earn profits off of debt collection. The grandma and grandpa don't get money to eat on that month.

Quote:
BUT there are people who, if given a breathing spell, would use it wisely. They would perhaps be able to set aside money for saving, etc.


And then there are the people on the other end who don't get their money because the debtor did not pay. Lenders have to factor in risk of default as part of the deal. Our system has bankruptcy instead of the seventh year sabbath and the jubilee.
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