I'm watching basketball - our coach is under a five year contract. He promises recruits he'll be their coach next year, and the next. etc. But if he gets a better offer, he'll leave, the next school will pay a large penalty for breaking that contract, and not one person will assert he has a moral obligation to harm his family's financial future and stay at the local university. Where is the principled difference between that and defaulting on a mortgage? Would any Fortune 500 company citing morality or ethical principle remain in a contract, repay a loan, if it's in the interests of shareholders to terminate the contract or default on a loan? Of course not.
They want the security of the long-term contract when they sign it. Maybe if they want flexibility they shouldn't sign a long-term deal and go just 1 to 2 years at a time. I would approve if teams/businesses started denying these requests. Both sides should be held to their negotiated deal. If they don't want to be 'stuck', they should sign shorter deals.
If, when defending your support for Donald Trump, and your response is,
"But but but... HILLARY!!!", then you lost the argument before you even began.
Last edited by tuhaybey; 01-27-15 at 11:22 PM.
And if the person defaults or is successful in their fraud...how are they paying?
Now granted, of course businesses have penalties written into those loan contracts. However legal costs, are also passed on. And if the person defaulting declares bankruptcy for example...there is not more to squeeze from the stone.
But the businesses have...as you even pointed out...created business models so that they do not pay or lose profit share.
Even more commonly, when you go to buy a house 5 years later, they tell you they won't give you a loan because you have an outstanding default. You then go back to the first bank, they say that now you owe them $25k instead of $5k with the fines and interest and so on. You pay them that and then you still pay 5% more on your mortgage interest rate on top.
You always pay more than you got by defaulting. Banks don't rely on people being nice. They wouldn't give out loans if they hadn't got it figured out.
If somebody wants to scuttle their credit rating for a few quick bucks now, that's dumb. They're screwing themselves over. But I wouldn't call it "immoral" or anything so melodramatic. I'd put it in the same tier of things as, for example, failing to repair a leak in your roof despite the fact that a leak can pretty quickly do serious damage to your home value.
Last edited by tuhaybey; 01-27-15 at 11:53 PM.
Many, perhaps most, families in the U.S. are in such a situation. The most common reason to run up debt is for car repairs, medical bills, home repairs, and so on. In at least some of those instances, such a case exists.Originally Posted by Papa Bull
More generally, our money is generated by the creation of debt for which we, the people, are ultimately responsible.
Currency was originally made of stuff that was itself considered a resource which took effort to extract. The theory was that such currency would naturally track along with the production of other goods such that there would be just about exactly enough. The economy, and not a banker, generated money.Originally Posted by Papa Bull
The means and rules by which money is distributed in a society are determined by people, and those means are not always equitable.
We are talking about the business having a business model that spreads that default and loss of interest, etc across all other people that do business with that institution.