Re:Perpetual Debt in the Silicon Savannah
by wutbrodo on Friday September 20, 2019 @11:40PM
(#21033344)
I guess what I was addressing was the claim that the rates are "unjustifiably" high given the aggressive recovery tactics:
> tools and punishments lenders use to lower the risk of default below what justifies their high rates
My point was that this assumption was unfounded, and it's a better baseline assumption that the counterfactual of aggressive recovery tactics would be even higher rates.
It seems we're in agreement that it can be entirely salutary for the government to decide to limit the actions you can take to recover debt (at the likely cost of higher rates), but it's important to be clear on the model we're using here.
> tools and punishments lenders use to lower the risk of default below what justifies their high rates
My point was that this assumption was unfounded, and it's a better baseline assumption that the counterfactual of aggressive recovery tactics would be even higher rates.
It seems we're in agreement that it can be entirely salutary for the government to decide to limit the actions you can take to recover debt (at the likely cost of higher rates), but it's important to be clear on the model we're using here.