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But the bank owes you money (at least if you have savings...). And the government owes you money if you have cash. So wiping out all debt would end up with nobody having any money. Effectively, what you'd get would be a transfer of wealth from those who currently hold money to those who currently hold the means of production. In other words, it would transfer wealth from your pension fund to the most leveraged companies...

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Dec 20th, 2008 at 07:23:27 AM EST
[ Parent ]
So you'd only wipe out usury - slash credit card and loan repayment rates but strictly limit further borrowing, pull interest rates on mortgages close to zero, reinforce credit lines to small businesses, generally push banks to stop ripping off their customers with punitive borrowing charges and return them to a less dramatic but more useful service-based industry.

We've seen that governments really are the lenders of last resort in most economies anyway - so governments should step in as grown ups and manage debt intelligently rather tha running around trying to pour petrol in random corners and hoping that something happens.

The hedge funds are a completely different issue. I can't see any reason why hedge funds, or any similar market mechanism, should be legal. Closing them down and handing out whatever remains, no matter how small it is, would be a useful controlled demolition and eliminate a lot of market uncertainty.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sat Dec 20th, 2008 at 07:37:56 AM EST
[ Parent ]

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