Um, they literally do? In aggregate, it's a similar effect as a VC-backed company burning capital to push out competitors. You're spending money you don't have, which drives the economy, raising demand and prices. The people who don't do the same can now afford less. Then the balloon pops, and your debt is forgiven, while you've reaped all the benefits from having the extra capital that your peers didn't.
Even in a simple terms, it hurts people's sense ethical and societal obligations. Why should I deprive myself of consumption and be a responsible economic participant, when I can spend money I don't have and then have my debt forgiven?
It is only fair in the sense that people need to be able to move on. Unfair is perhaps not the right word but I struggle to think of a better description.
Ill try a perhaps stupid example I guess..
If I agree to borrow my car to you I kinda want it back eventually? In bankruptcy it becomes a conversation about who needs my car more? uhh??
Others should learn from that not to allow anyone else to drive their car (even if they badly need it) and that having the keys mean you don't have to give it back.
Banks creating money out of thin air does change the topic a lot.
I'd like to see a [small] basic income that pulls a substantial number of people out of the paycheck-to-paycheck horror movie.
Even in a simple terms, it hurts people's sense ethical and societal obligations. Why should I deprive myself of consumption and be a responsible economic participant, when I can spend money I don't have and then have my debt forgiven?