Hacker News Reader

Comment by dragonwriter | Hacker News Reader

> There is no "cancelling" debt. There's only forcing other people to pay.

No, there is actually cancelling debt.

There is also forcing someone else to pay, but that’s a different thing.

Its probably the case that only some (such as government-held portion) of the debt at issue could Constitutionally be cancelled, in the strict sense, though.

> The incentives here are entirely backwards.

Because its not (unlike, say, bankruptcy), an ongoing thing available to people in the future, it has negligible incentive effect. Even as precedent, the expectation “if a set of debts across society becomes sufficiently onerous, they may be cancelled for everyone” creates very little incentive for anyone.

View on HN

> Because its not... an ongoing thing available to people in the future

So the debt gets cancelled then banks and institutions restart their vicious cycle of predatory education price and predatory education loans?

What exactly is the goal here?

> What exactly is the goal here?

To mitigate the social harms resulting from the current debt load that have accumulated over decades as part of a process that includes development of policies to prevent getting back to the same state.

(Some of which actually may already have been adopted, as all of the debt areas at issue have seen policy reforms over the last decades that could be part of that, though most cancellation advocates would argue—and I would agree, even though I don't necessarily agree with “cancel it all”—that further work remains to be done.)

> as part of a process that includes development of policies to prevent getting back to the same state.

Can you give an example? I may just be out of the loop.

> Can you give an example?

Considering just the educational side:

For policies that have already been put in place, the 2016 revision (partially undone by the 2019 revision) of the Borrower Defense rules are an example.

For not-yet-implemented rules that have been proposed, rules imposing total cost limits on programs accepting federal loans, or imposing other cost and quality requirements on such programs, are common. As are simpler reforms like making income contingent plans the default repayment plan, and other rules governing direct loan servicing (an issue with the student debt crisis haa been servicers active directing borrowers into deferment rather than income contingent plans.)

Yeah, but the most likely outcome is removing the current debt load without making the changes that prevent things getting back to the same state. The result will be that everybody rushes gleefully back into the same state, expecting to be rescued again.

At least, that's what seems "most likely" to me...

> No, there is actually cancelling debt. There is also forcing someone else to pay, but that’s a different thing.

How are these different things?

-Money was disbursed to the university. That money came from somewhere!

-If the loan gets canceled and the student does not pay it back, those who contributed the disbursed the money are the ones being forced to pay.

I think the difference is this: If you owe me money, I can cancel your debt. But if I won't cancel it, you could also end the debt by forcing dragonwriter to pay me. That's different because there's a third party involved.

Reply on news.ycombinator.com