Bailing out banks not people is a recipe for economic calamity.
At some point, debts that can’t be paid will not be paid.
Hudson’s oft-repeated golden rule is “Debts that can’t be paid, won’t be paid.” That is to say: making it harder to declare bankruptcy, or binding debtors over to arbitration or wage-garnishing won’t actually get them to pay debts they cannot afford.
This is a very sharp observation in the US context. The 2008 crisis was “solved” by bailing out finance, not people – and so the finance sector was able to lend to consumers to buy things again, while consumer debt mounted to spectacular levels.
Between mounting costs for housing, education, transport and health – a place to sleep, a path to employment, a way to get to work, the physical capacity to do your job – being alive has meant increasing your debt burden.
