Because, when you go to prison, the price of your company's stock triples. :-)
Posted on 03/11/2005 9:27:36 PM PST by The Loan Arranger
Years ago, this country did away with debtors prisons. The nation in general, and poor people in particular, would be well served to bring them back. The harm to business from unpaid debt, and the reduced productivity and even business failure unpaid debt can bring, is obvious. Businesses or individuals who are not repaid the money they loaned or who are not paid for the goods or services they produced and sold on credit are prevented from accumulating needed and even expected capital for expansion, and they are frequently thrown into serious financial constraints making it hard to pay their own creditors and employees. This not only can theoretically choke the gross national product, many recessions and even the Great Depression have been in fact brought on at least partly by unpaid debt.
But debt relief measures, either in the form of actual debt forgiveness or in the form of relaxed procedures to collect debt (including the abolition of debtors prisons), are generally thought to help the poor. The idea that once again forcing poor people into involuntary servitude to pay for meager food and shelter is certainly a tough sell. But here goes.
A return to debtors prisons would help poor people in at least five ways: 1) increasing workforce participation; 2) increasing personal responsibility; 3) making it easier for the poor to climb the economic ladder through entrepreneurship; 4) reintroduction of the virtues which have proven the only reliable way of the poor to leave poverty; 5) making credit more readily available.
(Excerpt) Read more at jesbeard.com ...
With America's addiction to debt, let's just declare the country a penal colony, and be done with it!!!
that's part of the PROBLEM, not the solution
Why not go back to slavery. It makes good economic sense doesn't it?
Probably true, but his #4 is a very good point.
The point is that the easy credit has become addicting like cocaine and has produced results that have turned the poor into psuedo slaves. Hence the saying "I owe, I owe, so it is off to work I go", instead of "I own, I own, I'll retire early you know"
When I met him some 25 years or so later and confronted him, he lived.
We're both retired now and haven't talked since.
Actually, if slightly rephrased, it could be part of the solution.
In particular, right now people who are deemed to be poor credit risks are often assigned extremely high interest rates based in part on the fact that the larger a person's balance when they declare bankruptcy, the greater a fraction of their assets the creditor will get. If someone carries dept for four years at 18% and the creditor ends up getting 50 cents on the dollar, the creditor will almost break even. Had the debt been at 5% interest, however, the creditor would stand to lose a lot of money.
So if the effect were to reduce the interest rates that were charged by sub-prime lenders, that could make it easier for people to work their way out of debt.
Fundamentally, the goal in a fair and just bankruptcy system should be to make it so that bankruptcy is bad enough that nobody will willingly let their debt spiral out of control if they can avoid it, but not so severe that people's life is forever ruined. Very tough balancing act.
I say bring back indentured servants. People who owe money will be forced to work in small cubicles with motivational posters and Dilbert comics.
But do you really think throwing people into bondage is the solution? The lenders have to take a little responsibility here. Don't make riskey loans and you won't get burned for the most part.
Because, when you go to prison, the price of your company's stock triples. :-)
Debt was the very thing that King George knew was the key to keep America a British colony, however George Washington realized this when he was farming tabacco. He eventually revamped his farm to harvest wheat and instead sold to the carribean islands. Of the founding fathers, George Washington was the only President to die in the blak whereas Jefferson and Adams died in the red. Washington learned 2 important things that will keep you afloat, and they were owning lots of land and having no debt. Even Bill Oreilly mentions in one of his books that the key in having control of your lives and not allowing government to rule over you so much is to be debt free. Have you ever noticed a new delveloped area is surrounded by malls and walmarts, etc. Apparently this is a good thing, but I bet if we can look at the books of all the transactions that take place it's all in the RED.
There is a third thing he also learned -- he "married well." Martha brought a tidy sum to the marriage.
that's swell, but a little beside the point.
creditors are currently deliberately extending lines of credit to folks who are still wet behind the ears, don't know squat about resource management, have no idea what they are going to do for a career, etc... in order to hook them into revolving debt on a high APR.
I was one such hapless moron, and it has taken years of busting my hump to claw my way out of debt. There are many who are not so brutal as I am. This is why "debt consolidation" is now a huge business (and, often enough, a fraudulent business itself).
This crap needs to STOP.
If it were to stop, yes: the consumerism base of our economy would take a massive hit. GOOD. Because the CAPITALIST base would surge back into primacy - where it ought to be.
I'm about to go an additional 400 grand in debt. I'll have a total debt load of 500,000 not including my future spouses investment debt of 400,000. By the end of the year our combined debt will be near 1 million dollars. But our equity gains on that debt is moving nearly 20%. In ten years we will owe on that debt nearly 500,000 with almoust 1.5 million in equity- and that is just off these investments. Debt is a mofos friend.
Debtor's prison would be a form of bankruptcy where the lender did not get repaid. Debtor's Prison is about detering the excess borrowing that enslaves today's poor.
Don't misunderstand here. If you take on debt you are obligated to repay it. Credit card companys make loans too easy and have to shoulder some resonsibilty in the matter. But the people who rack up the debt are also as responsible.
I suspect you have never read The Constitution or studied history. Debtor's prisons and indentured servitude were prohibited for good reason.
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