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Should we have Bankruptcy laws?

From this Rothbard article: http://lewrockwell.com/rothbard/rothbard190.html

"In a just society, then, only voluntary forgiveness by creditors would let debtors off the hook; otherwise, bankruptcy laws are an unjust invasion of the property rights of creditors."

He then goes on to call debtor's prisons "a bit" draconian but presumably better than what we have now.

Where do you fall on this issue? I personally support (sound) bankruptcy laws because:

1. No one should have all their property taken and starve to death for defaulting on a loan, which is really just a breach of contract.

2. Debtor's prisons and the taking of all property leading to sickness/death are cruel and unusual punishment, so to abolish bankruptcy and allow either "market" solution would necessitate a welfare safety net system to avoid unconstitutionality.

3. Bankruptcy laws were either not widely held to be violations of the substantive right to contract at the time of the founding, or considered a necessary and permissible violation of it, which is probably why it specifically enumerated in the Constitution.

4. The orderly repayment of debts is more just than first-come first serve because that system allows the debtor to pay back only favored interests(like family) in full rather than splitting the pot to reduce the damage from the default.

5. You could contract in loans to avoid an obligation to pay in full and basically contract-in your own terms of debt repayment, but risk-takers will not want the higher interest rates that come with that so we dont know how common that practice will be.

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Bonanza? Seems ya gocha Cartwright before yer Hoss.

Is modern bankruptcy but a tender love story? A fictional legal... tender story?

Follow the money:

  • Is "legal tender" created out-of-thin-air? A promissory note?
  • The origin of National Debt? How is it promissory note becomes cash?
  • How is it a promissory note is given in lieu of money as salary or wage?
  • How is it that a promissory note is given to pay a promissory note?

Upon following the creation of "legal tender" are you mystified as to how bankruptcy should be degrading any beyond the bank that created it. Is legal tender really tender?

[Victrola betcha find sand in your eyes... Bonanza: The Cartwright Singing]

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

OK Brawler,

I am an anarchist, and I can see the possibility of bankruptcy laws in a free anarchist society. They would not be anti-free market, as the law itself would be created by market forces. In fact, an anarchist society is more ethically capable of implementing such laws than a minarchist society.

Libertarianism, when it comes right down to it, is simply self-restraint with regard to the use of violence. The libertarian credo is simply this: Violence can be used, AT MOST, for self defense. It is perfectly consistent with this credo, that, at least sometimes, violence is not even justified for self defense. Thus, bankruptcy laws: The law will not use violence, in some cases, to defend against a breach of contract. This is consistent with capitalism, Christianity, and even pacifism.

Brawler, I know you don't hate anarchists, but you seem to despise anarchism. I used to be a minarchist, until it became clear that minarchism was not truly consistent with maximum liberty. I respect consistent minarchists (although I find them few and far between). Could you just take your snottiness regarding anarchism somewhere else? Follow the example of Ron Paul, a minarchist who has openly embraced, accepted, and acknowledged his anarchist supporters.

We know what the free market

We know what the free market creates and its nothing like the bankruptcy laws we've seen. Its first-come first serve. Into that void came bankruptcy laws.

Ventura 2012

Snottiness?

Snottiness? For the record, I actually despise a few on the self absorbed, emotional, myopic anarchist evangelicals here but have no problem with the theory of anarchism(as a theory, not in practice).

Ventura 2012

Just a note Brawler,

Murray Rothbard is not the end all and be all of anarchism, or even anarchocapitalism. While he was a brilliant, principled and truly funny man, and was almost alone in his courageous stand against the insanity of the Cold War during the early years of the modern liberty movement, his theories were still something of a "Beta Version" of liberty. While no discussion of liberty is complete without including his contribution, there are many, many good minds refining his ideas and coming up with possible models and guidelines for constructing a free society. Sadly, I feel there will be plenty of time for us to think about these ideas before there is any chance of an actual implementation. It seems that the vindictive, harsh, violent nature of the people running things in this world will make necessary a "long, dark, night" before liberty is triumphant. I only hope I am wrong.

If the Crooks at the Banks were doing what they were

supposed to be doing with the public debt, there wouldn't be a need for anyone to file for Bankruptcy.

Remember HJR-192 aka Public Law 10 chapter 48 & 48 Stat 112?

That's right folks, when they took our Gold, it took away our ability to actually 'pay off' anything. So, they had to give us a remedy, and that remedy is Public Law 10.

All public debts are pre-paid in advance. That means all utilities and homes. When you sign the note on your home at the Bank, you need to walk out with the Deed, because your signature just paid off that house.

But the crooks don't tell you that. No, instead, they endorse the back of your promissory note and deposit it in a secret account in your name. Then 72 hrs. later, they call the Treasury Dept, and say "Hey, someone has abandoned this account, can we have it?", and the Treasury says "Sure, it's all yours!".

Then the crook bankers pillage that account for about 10 more than the actual note that was created with your signature (remember, fractional reserve banking?), and Con You Into Making $1,200.00 Payments AGAIN on that house for the next 30 years.

I just posted this:

http://www.dailypaul.com/244590/want-to-stick-it-to-the-bank...

If you feel bankruptcy is

If you feel bankruptcy is okay then how about loaning me 20 grand and I won't have to pay you back?

A loan or contract should spell out all terms as well as how default is handled.... Maybe you wouldn't want to go as far as prison but, you may want me to back up the loan with say my house? Bottom line both parties agree upfront.

I imagine in a world of sound money we would not have so many loans. How did we get along before credit cards, school loans, and all the rest? Can you imagine actually having to work and save being denied instant gratification? Today that would mean getting out of high school and working 2 jobs for 5 years then going back to school. That would be far better than it works today. Out of high school right into a life long debt!

Banks have loaned with or

Banks have loaned with or without bankruptcy laws in place so its sort of a moot point. Bankruptcy laws just mean higher interest rates.

Ventura 2012

Actually the bankruptcy laws

Actually the bankruptcy laws keep consumers from being able to get credit. The bar has to be set much higher to be fairly sure the debtor will not be a candidate to use the laws before the loan is payed off. If a bank could have a judgment placed on a debtor without the threat of bankruptcy they would have a debtors lifetime to collect. I'm sure the signature loan would be available to many of the consumers who today would not qualify (because today they ware chapter 7 candidates).

Right, its a trade-off. Lower

Right, its a trade-off. Lower interest rates, easier access are forgone in order to not have a society with first-come first-served debt collection and literal debt-slavery/starvation scenarios.

Ventura 2012

No we have government getting

No we have government getting in the way of contracts. Don't borrow money you can't afford to repay. Credit cards are behind the majority of bankruptcies. People live just like the government runs! Above our means. No one owes us anything other than liberty and freedom. It is up to us how we use that.

I know medical bankruptcies? I'm sure all those credit card bankruptcies are from people buying insurance right? Medical is a issue all to it's own. I imagine when the day comes that a bankruptcy doesn't protect the consumer Insurance will become much more important to the individual.

You don't necessarily know

You don't necessarily know you can't repay though. Some investments look like a sure thing and then there is some structural change in the market.

Ventura 2012

In a free society there would be no law protecting bankruptcies.

Whether it was an individual or business. If you break a promise (contract) then you lose whatever you owe.

If you default on a car loan then your creditor gets the car.

Same with a house or anything else.

Regarding businesses, they are gone if they default on any obligation.

The big question is about health care.

Since there is no collatoral after you get health care, there's nothing you can give back if you default on a medical bill.

Any ideas regarding defaulting on a health care bill would be welcome.

"We have allowed our nation to be over-taxed, over-regulated, and overrun by bureaucrats. The founders would be ashamed of us for what we are putting up with."
-Ron Paul

Lysander Spooner once said

Lysander Spooner once said enforceable contracts are property title transfers, not promises. I don't agree with the existence of bankruptcy laws either, but 'promise contracts' would not be prevalent in a free society.

On health care, the collateral doesn't have to be related to health care...It is just a security for the loan. Some companies even garnish wages. Since health care would be plentiful in a free society, collateral(and garnished wages) wouldn't be much of an issue anyway.

Say you was given a triple

Say you was given a triple bypass and paid a third back and defaulted.. They could open you up and tie two arteries shut.. Even! (Joke).

You would have a judgment against you for life with stiff penalties maybe even prison if you avoided paying when and if you could (all in the contract). Bottom line you are responsible for your debt period. No free outs. I imagine under those conditions we would look at insurance in a whole new light. Maybe driving a brand new car, having that extra bedroom, and the other luxuries are not as important. Hopefully with the government out of insurance some common sense would come back into the industry and prices would become much more affordable.

Back in the day Churches provided hospitals and people would have drives to help people out. There used to be more doctors like Ron Paul. I imagine if we got the government off of today's doctors backs we might have many more like him. The cost was not nearly so high in comparison to wages (when the government was not involved.)

By common sense Insurance I mean insurance companies should issue drivers license. Look how poorly the states do this. People with whole strings of DUI's are still driving. Pay 20 bucks get your photo taken and take a few simple test and you are driving! An insurance company may be just a bit more careful who they hand the keys to since they have so much at stake. Same with building permits and codes. What insurance company would insure a faulty building? Yet the government will back a home built on the ocean that will flood every 10 years! It works the same for medical I imagine they would cover much more preventative care than cure. Meaning they may cover 100% of sun screen yet only 50% skin cancer... A true free market would work it out much better than the mess we have today.

With freedom comes responsibility.

bump for anarchists

bump for anarchists

Ventura 2012