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Thread: Stephen Roach: Consumer Debt Forgiveness May Be Needed

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    Stephen Roach: Consumer Debt Forgiveness May Be Needed

    It might be time for something that hasn't been done since the 1930s to get Americans spending again: national debt forgiveness, Stephen Roach told CNBC Monday.

    A stronger dollar or higher interest rates would encourage consumption and saving, Roach said, but he prefers the more "direct approach" of coming up with "ways to forgive the excesses of mortgage, installment and revolving credit, as what was done in the 1930s, that will help consumers get through the pain of deleveraging sooner rather than later."
    Read the rest here: http://www.cnbc.com/id/44229642

    I was asked what an Austrian would think of this plan. While I would think that this is obviously better than forgiving corporate debt, I am drawing a blank on how to respond. I am curious to see what everyone thinks.



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  4. #3
    Go for it. Just let me know how long I have to run up my credit cards...
    "When the power of love overcomes the love of power the world will know peace."
    - Jimi Hendrix

    "If one rejects laissez faire on account of mans fallibility and moral weakness, one must for the same reason also reject every kind of government action."
    - Ludwig Von Mises, Planning for Freedom



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