Sunday, February 14, 2016

Debt Forgiveness

I had a conversation with a young person recently who was gung-ho on the government forgiving all the student loans because all that freed up money could be spent on cars and houses.  I explained that of us who own SLMA bonds would lose not only the interest but the capital, reducing what we have.  Of course, Bernie Sanders is preaching everything should be free.  I like the idea.  Congress can similarly prohibit use of the courts from collecting car loans and mortgages.  Think of all the money that will free up!

For those who thought I was serious: :-)


  1. I would oppose debt forgiveness. On the other hand allowing young people to borrow unlimited amounts in student loans with the debts guaranteed by the government and undischargeable in bankruptcy is crazy public policy and encourages people to make horrible mistakes.

  2. Didn't something like this also happen with the money the "made men" of the East India Company borrowed so heavily when they first became members/shareholders?