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Originally Posted by vicky_molokh
I mentioned bankruptcy in the very post you quoted as something most people wouldn't want to happen to them.
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Not sure how that's a problem. People
should want to avoid debts they can't pay off. The goal with things like bankruptcy law is to have a penalty that's large enough to discourage the unwanted behavior (people borrowing money they cannot or will not repay) without being utterly crippling. You can certainly argue with the proper magnitude of the cost, but there
has to be a cost. Unless of course you want credit to be unavailable.
Quote:
Originally Posted by vicky_molokh
Among other things, this thread is an attempt to explore a divergent techpath that dealt with the root cause (or at least closer to the root cause) than the bankruptcy 'patch'.
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What is it you think is the root cause? It's not interest. Interest is not per se bad. The root problem is borrowers being unlucky or making bad financial decisions and bankers encouraging people to make bad financial decisions. You can't legislate away stupidity or bad luck, but you may be able to structure the financial system to discourage it or mitigate it.
Quote:
Originally Posted by vicky_molokh
When I talk about washing hands off, I mean specifically the banks being very insulated from losses in such cases, as compared to people who get into debt they are likely to fail repaying in time. Yes, rules down the line can be used to mitigate this, but apparently our world hasn't managed to reduce the problem to an un-notable one, and I'm interested in exploring a divergent approach.
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It's impossible to make the problem un-notable; credit cannot exist without a means for the lender to profit, and an enforcement mechanism to require borrowers to make an honest effort to repay their debts. This is, necessarily, going to be bad for people who fail to repay debts. You can tweak around the edges to adjust what you consider an honest effort, and what the penalties shall be, but penalties necessarily exist.
Quote:
Originally Posted by vicky_molokh
To some extent. But presumably the captain has better skills at profitable ship-captaining than the people whose skill set is focused on banks-running
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This assumes a captain who is honest and competent. Neither of these things can be taken for granted.