Hacker News Reader

Comment by holoto | Hacker News Reader

Everyone can decide to not pay back lent money and it's his or her right to do so.

It does make getting contracts in the future much more difficult though.

I wish more people remembered this - breach of contract is business, not moral decision.

Many consider breaking promises to be wrong and contracts to be promises, and so consider breaching contracts to be immoral.

Many others also consider the long-term negative consequences of breaching contracts to be worse than short-term positive consequences. If they consider short-term thinking at the cost of the long-term to be immoral, they would consider breaching contracts to be immoral.

To you, breaching a contract might just be another IF-THEN which is implicitly or explicitly coded into the contract, but others consider it to have moral weight.

I agree. Back when the financial crash happened and people were walking away from their mortgages, there was a lot of bloviating about those people's moral duty to pay their mortgages. There is no moral component to it at all. Only a financial one.

If morality is determined by "do unto others as you would have them do unto you", then I think this probably is immoral. It's fairly low on the range of immoral behavior, but it shouldn't be a purely economic calculation, in my opinion.

The creditor failed that by not offering the credit at zero interest, as they would have liked to have done unto them. Why should the golden rule only be applied one way?

I don't understand your line of reasoning.

You are a lender of money. Someone asks you for money. What's the interest rate you should charge if you apply the golden rule? Zero, because that's what you would want to be charged. Therefore, the creditors in this case broke themselves the golden rule, and shouldn't complain that the debtors did also.

Why would I want the lender to charge me zero interest? I know that she can't do that, particularly if I know I'm a risky borrower.

I want a rate that is reasonable to the risk, because if I insist on a lower rate, I won't be able to borrow at all.

I think you are knocking down a straw man argument; namely that "the golden rule means 'give away everything you own'".

I don't think anybody who would use the golden rule as a moral tool would really interpret it that way.

Not give away; I still wrote "lend".

Future contracts depend more on the position of a country than on its payment history. Consider Ecuador. It has better ratings and access to credit after it pursued aggressive debt haircuts.

The difference is that the only reason Greece is able to loan money at all is because they are lending from the ECB/IMF at below market rates, an option which they will no longer have when they leave the EU and default on IMF loans.

A non-difference is that most of those loans went to service old loans anyway. And the main reason Greece can't get loans on the markets is because its current debt is obviously unsustainable and its position as a deficit country in a badly designed monetary union is hopeless.

You hit the nail on the head with the position as a deficit country: Greece will have to solve that whether it stays in the EU or not. The question is which way to achieve that is harsher: the political force of the EU, or the market force Greece will have to endure when it goes back to its own currency. I think the latter will be harsher, since nobody has any incentive to keep Greece afloat other than if it generates a personal gain, whereas if Greece stays in the EU then countries like Germany have a greater interest in keeping Greece afloat to prevent destabilization of the EU. Therefore they will funnel money into Greece at rates that have negative return on investment if you look purely at Greece, but which will have positive return on investment if you factor in that it keeps the EU stable. The market however, has no such incentive.

Reply on news.ycombinator.com