> Lenders keep issuing loans without regard for the borrower’s ability to repay, knowing the debt can’t be discharged. ... Meanwhile, lenders—both government and private—keep the money flowing. Why wouldn’t they? With loans that can’t be discharged in bankruptcy, they’re guaranteed a return, even if it takes decades to collect.
From the first chapter of David Graeber's "Debt: The First 5000 Years".
> “But,” she objected, as if this were self-evident, “they’d borrowed the money! Surely one has to pay one’s debts.” It was at this point that I realized this was going to be a very different sort of conversation than I had originally anticipated.
Sounds like the perfect way to create a system where the only way out is some kind of black swan bubble burst. I (genuinely) wonder who will be protected from the shockwave when it does: the number of people on the debt side is presumably enormous.
> Lenders keep issuing loans without regard for the borrower’s ability to repay, knowing the debt can’t be discharged. ... Meanwhile, lenders—both government and private—keep the money flowing. Why wouldn’t they? With loans that can’t be discharged in bankruptcy, they’re guaranteed a return, even if it takes decades to collect.
From the first chapter of David Graeber's "Debt: The First 5000 Years".
> “But,” she objected, as if this were self-evident, “they’d borrowed the money! Surely one has to pay one’s debts.” It was at this point that I realized this was going to be a very different sort of conversation than I had originally anticipated.
Sounds like the perfect way to create a system where the only way out is some kind of black swan bubble burst. I (genuinely) wonder who will be protected from the shockwave when it does: the number of people on the debt side is presumably enormous.