by marko » Thu 22 Sep 2005, 16:39:56
$this->bbcode_second_pass_quote('Heineken', 'W')hy would those who do have debt and who think we are headed for collapse want to pay it off?
How would collection be enforced in a collapsing society? Historically, debt is written off under such circumstances. The organizations that issue it cease to exist or are drastically reshaped.
I think that we are ultimately headed for civilization collapse, but long before that happens, I think that millions of indebted Americans will go bankrupt when we go into a deep recession or depression.
The US government has shown (e.g. by the recent bankruptcy bill) that it is committed to defending the interests of the owners of capital at the expense of most of the people. I think that the US government will enforce the terms of the new bankruptcy law, which basically turns people who can't repay their debts into potentially lifelong indentured servants, or modern serfs, to their creditors.
This new bankruptcy bill makes any kind of debt, including mortgage debt, a real threat to the freedom of the debtor.
As for the possibility that inflation will rescue debtors, I see this as very doubtful. Again, the US government and the Federal Reserve Bank (Fed) have proven their allegiance to the financial interests. If inflation threatens, the Fed will raise interest rates to defend the dollar. This will only make life harder for debtors.
Eventually, I believe that US government insolvency will lead to a round of hyperinflation, but I think that this is several years down the road and that something will be done in the meantime to indemnify the financial interests from the effects of this hyperinflation, perhaps by allowing them to charge interest on private debts that would compensate for the effects of inflation. (I am potentially talking about million percent interest rates here.)
