Debt amnesty. Could this work?

Liverlad67

Since many people got into trouble due to the banking crisis instead of ruling people out of credit mortgages etc for six years why not give everyone a clean slate? Surely better than quantative easing etc. did happen but not sure where. Don't mean wipe out the debt just the impact on your rating for six years.

Generali

It depends what you mean by 'work' really.

If there's a debt amnesty then you are seizing the assets of banks. Ha! That'll show those greedy bankers right? Only it won't because the banks are owned by their shareholders which is mostly you and I in our pension funds. Banks would all be immediately erm bankrupt so savers would also be wiped out along with most companies as their working capital would disappear so couldn't pay suppliers or workers.

I suppose the Government could print money to buy the debt off the banks but that would unleash an inflation tsunami through the economy I suspect.

Having said all that a partial debt amnesty could work or even simply giving each person £ xx to spend/pay down debts. That's what the Australian Government did at the start of the GFC.

purch

Sounds like a great idea.

All those who over borrowed and got themselves in trouble can have the "slate wiped clean" so that they can begin the whole process again.

In the meantime, those who didn't can pick up the tab.

TickersPlaysPop

To original poster...

This will make you even more angry..... the bank don't have money to lend before a mortgage is created. The money is literally created from thin air when we borrow money from banks. It is called the debt money system, or purposefully named "fractional money system" to confuse us laymen.

https://m.youtube.com/watch?v=_syDOz1NIrw

Only 5mins video and well worth watching.....

antrobus

Liverlad67 wrote: »

Since many people got into trouble due to the banking crisis instead of ruling people out of credit mortgages etc for six years why not give everyone a clean slate? Surely better than quantative easing etc. did happen but not sure where.

We had a "banking crisis" because "many people got into trouble" with their "credit mortgages etc".

Liverlad67 wrote: »

...Don't mean wipe out the debt just the impact on your rating for six years.

An interesting proposal. But I'm not sure how making it easier for people who have previously (and recently) defaulted on their debts to borrow more money is necessarily going to make anything better.

princeofpounds

The dramatic suppression of interest rates is effectively a partial debt amnesty anyway.

Generali

TickersPlaysPop wrote: »

To original poster...

This will make you even more angry..... the bank don't have money to lend before a mortgage is created. The money is literally created from thin air when we borrow money from banks. It is called the debt money system, or purposefully named "fractional money system" to confuse us laymen.

https://m.youtube.com/watch?v=_syDOz1NIrw

Only 5mins video and well worth watching.....

No it isn't. Try to understand before you post.

CLAPTON

Liverlad67 wrote: »

Since many people got into trouble due to the banking crisis instead of ruling people out of credit mortgages etc for six years why not give everyone a clean slate? Surely better than quantative easing etc. did happen but not sure where. Don't mean wipe out the debt just the impact on your rating for six years.

Banks and building societies lend out other people's saving

So if all debt is cancelled then people would lose their savings :

so we could give everyone a clean sheet : cancel debt and confiscate savings and make everyone equal.

MrRee_2

I agree with the poster above saying that the debt amnesty is in the form of free money, or effectively free money .... due to the amazing low interest rates.

I was paying 15% on my mortgage in the 1980's .... imagine the carnage if that applied now?

It was tough for us oldies .... don't ever forget it. But we had resiliance and the 'can do' attitude lacking so much these days sadly.

Marktheshark

CLAPTON wrote: »

Banks and building societies lend out other people's saving

.

No they dont, they are allowed to invent new money when someone borrows, the deposits remain as base collateral.

Generali

Marktheshark wrote: »

No they dont, they are allowed to invent new money when someone borrows, the deposits remain as base collateral.

Nope. You got that wrong.

Looks like we have a thread that attracts the brains trust here.