Ethics of Debt and Repayment 

The Ethics of Debt and Repayment


The assumption that the power elites want you to make is: When you borrow money, you have pay back your debts. Also, it is a moral obligation to pay the entire debt back.

The advertisements, marketing and public relations propaganda of the power elites attempt to have you think more frequently that you must always return the debt payments on time. So, in that case, your lender loses the risk.

Exception 1 is legal bankruptcy: Imagine that a bank loans a million dollars to a gambler who owns a house and a car, and this (pretend) loan money is to be used at a casino.  

If the gambler loses his bets and the million dollars is gone, he is unable to make the loan payments afterwards.

So, the bank takes his house and a few other assets as collateral, according to the loan agreement.  However, his assets do not cover the loan payments completely.

The losing gambler files for bankruptcy.  The lender is then unable to retrieve its losses.  

Now, imagine a slightly different situation. If the gambler has absolutely nothing, no money or other assets, and he cannot legally file for bankruptcy, erasing his debt, then the bank could own everything he has for the rest of his life. Moreover, the lender would have an extremely low risk because the loan recipient would always be beholden to the bank.

For instance, the bank could legally give out loans that people are unlikely to be able to pay back during their life times, and then the bank would be able to take any assets that the recipient makes thereafter.  The loan recipients who cannot pay their debts would become debt slaves!  

Undoubtedly, it is absurd for loan recipients to become debt slaves and lenders to become their debt masters. Such societies with economic systems of slaves and masters are antiquated. So, bankruptcy must be a legal option in any civil society. 

At best, then, it is arguable that you should try to pay back your debts, unless one becomes legally bankrupt because the lenders never deserve to become owners of slaves as debtors. 

A lender must always assume some risk of loss in any civil society with a functioning justice system.  Otherwise, the banks could just begin giving out loans that are used to take people’s assets and their future assets, effectively leading the lending bank to own people as debtors.  The banks could begin attempting to make it even harder for loan recipients to pay back their loans so that they can take all their assets from them and make them their slaves based on their debt!  

Through lending so much money, which lenders are unable to pay back, the lenders could make debt slaves, if there were no laws concerning bankruptcy.  Obviously, making slaves is unethical and illegal in any society with functioning justice systems.  

So, once bankruptcy is established, whatever means that the loan recipient gave for receiving the loan and whatever assets the debtor planned to use to secure the return payments are always good enough for the debtor to stop paying back the debt that he or she owed before the bankruptcy.


Unforgivable Debts in America: Student Loan Debt and Undermining the Education System

Against the Christian moral value of forgiveness, the U.S. government has allowed corporate powers to create unforgivable debt concerning student loans.

What this does is make it exceedingly difficult for Americans with student debt to contribute effectively to the economy.

With rising prices of degrees, especially over the last three decades, and increasing readiness of lenders to enter loan agreements with student borrowers, lenders have continued to lend, despite the growing inability for borrowers to pay the loan payments on time. 

In the United States, the idea was that it would be easiest to create massive amounts of debt through making student loans a type of unforgivable debt.  It would allow the power elites to gain money constantly through the massive amount of compound interest students and graduates have to pay.

The idea was brilliant for short-term gains because the elites realized that this type of debt would be for people who have a history of earning the highest incomes, i.e., people with university degrees.  However, while the justice system was being undermined via disallowing legal bankruptcy of student loan debt, the education system was also being undermined greatly.  So, the elites’ plan is not only failing, but now both the financial system and education system have been greatly compromised, in the early 21st century. 

Any international comparative analysis of countries with low debts for students, as compared to high debts of U.S., UK and other nations’ students, will demonstrate that there are problems of fraud, corruption and injustice in their education systems and banking systems. 

For example, many other countries without student loan debt (e.g., Germany and France) have identified cheaters who have plagiarism in their work, and they have rescinded their degrees from the universities.  Plagiarism has been detected and is used to identify and justify stripping graduates of their degrees that they obtained through fraud.

In Hungary, the former president had his doctorate taken away from him after significant plagiarism was discovered in his dissertation. In Germany, the former minister of defense had his doctorate rescinded as well.  There have been many European members of parliament who have lost their degrees and political positions, too. 

In the United States, however, the major difference is that NO high profile politicians have had their degrees rescinded yet. Also, no military or corporate power elites have had theirs rescinded with any news footage demonstrating their fraud and cheating in the mass media.  

However, there have been some high profile court cases that have shown the role of ghostwriting and false authorship, which has been particularly harmful concerning medical writings since ghostwriters cannot be held accountable for their own writings.  Also, other authors are gifted the publications so that the authorship appears to come from an impartial third party of experts.  However, the writings actually come from corporate writers who hide their identities to publish more effective propaganda for their corporations under the names of false authors. This creates an extra layer of risk to the society.

It is naïve to assume that that Americans are not cheating, not committing fraud and that they do not have plagiarism in their work at universities at least at the same levels of their European counterparts.  For now, Europeans academics are ahead of their American counterparts in virtue of raising a level of integrity at their institutions of higher education.  

From where does the money come that weakens the education system?

Wealthier students are able to take full advantage of buying university work, especially because instructors at universities have very low salaries. For example, a masters degree only earns a U.S. university lecturer at state universities about $3,000 for 16 weeks of teaching a single class, holding office hours each week and completing bureaucratic duties, and a doctoral degree raises that salary only $500.  

The U.S. education system has been thoroughly compromised via paying its university teachers very low salaries and hiring them as temporary workers who work part-time or full-time on the basis of the demand for classes at the universities. Moreover, the system is compromised even more via salaries of administrative workers making more than the teachers at the universities, in many cases.

Secretaries or hierarchical classes of “administrative assistants” from levels 1 to 5 and beyond can make more than many or most of their colleagues who teach classes, although the latter workers make the university system possible. Consequently, university teachers with masters degrees may decide to shift from teaching to administrative work in order to gain higher salaries, especially if they consider having families. 

For all of the latter reasons, improving the American education system involves decreasing the cost of tuition at public universities and forgiving students of their loans for university tuition.  


Debt is used to promote feelings of guilt against the poor and wield power over them 

The American proverb is: “If you owe the bank a hundred thousand dollars, the bank owns you.  If you owe the bank a hundred million dollars, you own the bank.” Debt is for the poor to pay back and for the wealthy to use as an aspect of their power.

During the 1970s, there was a global oil crisis, and the OPEC nations entrusted their newfound wealth in many of the banks of the West. Some of these banks, including Chase and Citibank, sent their agents into poor nations to persuade politicians and dictators to enter into loan agreements with them. The big first world banks lent a lot of money to these political figures from poverty-stricken nations, and the corrupt politicians, then, stole the loan money from their own countries and placed it in their own private Swiss bank accounts and other places.

By the 1980s, U.S. banking policies changed so that the originally low interest rates went up to 20% approximately, extremely high rates. So, the 1980s and 1990s led to the Third World having a debt crisis.

As a consequence, the International Monetary Fund (IMF) took charge. In order for the poor nations to receive the refinancing, they were required to sacrifice their food reserves, abandon free education and free healthcare. These banking policies with justifications from debts led to massive increases in the malnutrition, violence and extreme poverty in the poorest nations.

The wealthiest nations began sucking the money from the poorest nations based on the debt that was established from agreements by unelected dictators who stole the money along with their cronies. Also, many of the poor nations had already paid back the price of the loan three to four times over. However, these countries still had a lot of debt because of the compound interest. In essence, these countries have had to follow the banking policies from the U.S. and Switzerland that they would have never agreed to follow in the first place. 

David Graeber asks an economist from one of the Breton Woods institutions why there are no executives waiting to be brought to trial for the fraud of 2008, the financial crisis.

Breton Woods Official: Well, you have to understand the approach taken by U.S. prosecutors for financial fraud is always to negotiate a settlement. They don’t want to have to go to trial. The upshot is always that the financial institution has to pay a fine, sometimes in the hundreds of millions, but they don’t actually admit to any criminal liability. Their lawyers simply say they are not going to contest the charge, but if they pay, they haven’t technically been found guilty of anything.

Graeber: So, you are saying if the government discovers that Goldman Sachs, for instance, or Bank of America have committed fraud, they effectively just charge them a penalty fee. 

Official: That’s right.

Graeber: So, in that case, okay, I guess the real question is this: Has there ever been case where the amount the firm had to pay was more than the amount of money they made from the fraud itself?

Official: Oh, no, not to my knowledge. Usually it’s substantially less.

Graeber: So, what are we talking here, 50%?

Official: I’d say more like 20 to 30% on average, but it varies considerably case by case.

Graeber: Which means, correct me if I’m wrong, but does that effectively mean that the government is saying: you can commit all the fraud you like, but if we catch you, then you are going to have to give us our cut?

Official: Well, obviously I can’t put it that way myself as long as I have this job. 

In many countries, the poor and the middle classes are unable to take out substantial loans from banks during the 21st century.  The reason for this is that excessively wealthy people have used the process of entering loan agreements to lower their taxes to extremely low rates, and they use their yachts and other assets as collateral.  This is obviously not a sustainable system, and the lower and middle classes have suffered greatly from it as well as entire nations.  

As the system currently stands, the excessively wealthy are greatly contributing to monopolies in each industry and are using the money and banking system with debt in order to undermine small and mid-size businesses, which are unable to attain loans because the excessively wealthy have taken over the money and banking systems for their own loans.  In essence, debt is being used as a power play by the corporate and political power elites at the expense of the middle class, which is the life support for every society.  

The middle and lower socio-economic classes owe debts of service to their banks, whereas the wealthy make money from their banks by accumulating interest.  That is, the people who have bank accounts with just hundreds of dollars or merely a few thousand dollars are required to pay their banks fees for services.  However, people who have hundreds of thousands, millions of dollars or more are accumulating vast sums of money from the interest, especially compound interest.  In these cases, it is as if the banks are taking money directly from the poor and transferring it directly to their wealthiest clients.  

Thereby the debt for the underclasses makes any movements from lower to middle or middle to upper exceedingly difficult.  Moreover, it makes it extremely easy for the upper class to remain in power, gaining systematic advantages from the money and banking system of their countries. 

In effect, what this has accomplished globally is an even wealthier global power elite than in the past that FEELS like they deserve these privileges of access to the money.  However, that money comes to them from, and is made possible by, the poor and middle classes. The excessively wealthy feel entitled and increasingly value individualism over all other values, including over all of the moral values.

In these ways, the elites from multiple nations are very similar to each other because of their shared values.  They are very often narcissistic and thereby extremely dangerous to societies, especially their own societies from which they profit greatly while leaving poverty and destruction in their wakes.   

They are not patriots because they use their fellow citizens for their own private gains, and one important means of doing this is through creating debt for themselves, which is unnecessary, and creating debt traps for others.  However, their public relations and propaganda (PRP) characterize them as giving people who donate generously.  Their PRP smears others who expose them for what they are with vicious attacks, and PRP diverts the attention away from them as the sources of fundamental societal problems.   

Since we will not be saved by the wealthy power elites who use debt to their own advantages and to the disadvantage of the lower and middle classes, what can we do to solve these problems regarding money, banking and the use of unforgivable debt against the lower and middle classes?  


Citation: Brant, William Allen.  “The Ethics of Debt and Repayment.”  Ethical Conflict Consulting.  December edition.