No Minister

Ideas out of the Past

with 7 comments

Over on Britain the Tory Prime Minister, Boris Johnson, has had yet another brilliant idea for dealing with the fundamental problem of real estate prices getting away from working people, preventing them from buying housing.

Putting on my Class Warfare hat I have to say that this idea is entirely appropriate for a Tory:

Wait a moment, I think I’ve heard of this idea before. From history…

Debt bondage, also known as debt slaverybonded labour, or peonage, is the pledge of a person’s services as security for the repayment for a debt or other obligation.

I can see Boris as a feudal lord: he’s picture perfect to play the Sheriff of Nottingham in some new version of Robin Hood.

Of course it’s not just Britain. Here’s a story from 2014 in the USA:

A few weeks ago, with no notice, the U.S. government intercepted Mary Grice’s tax refunds from both the IRS and the state of Maryland. Grice had no idea that Uncle Sam had seized her money until some days later, when she got a letter saying that her refund had gone to satisfy an old debt to the government—a very old debt.

When Grice was 4, back in 1960, her father died, leaving her mother with five children to raise. Until the kids turned 18, Sadie Grice got survivor benefits from Social Security to help feed and clothe them.

Now, Social Security claims it overpaid someone in the Grice family—it’s not sure who—in 1977. After 37 years of silence, four years after Sadie Grice died, the government is coming after her daughter.

But there are many forms of intergenerational debt and the major one leaves Boris’s idea (and feudal practices) far behind. The following educational video was made a decade ago in the wake of the GFC, back when US Federal debt was a mere $14 trillion toddler, compared to the moody $30 trillion teenager it is now.

Written by Tom Hunter

July 6, 2022 at 11:04 am

7 Responses

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  1. If an owner wants out they can just sell the property. Nobody is making them take it on and nobody is forcing them to remain in the arrangement.

    It is no more “bondage” than any other loan.

    The issue is whether the accumulated interest wipes out the benefit of ownership including capital gain and saving on rent.

    John JohnO

    July 6, 2022 at 11:12 am

    • I was thinking more of a situation 2-3 decades from now where a declining population – especially declining in the working age population might lead to endlessly falling housing prices, as we’ve seen for a decade or more now in Japan – meaning your descendents can’t escape the debt by selling.

      Our poor ability to predict the future is just one reason why intergenerational debt is a bad idea – although the various national debts around the world have side-stepped that debate with young people, although they’ll figure it out sooner or later – and I think they’re going to be very unhappy!!!

      Tom Hunter

      July 6, 2022 at 11:25 am

  2. On the bright side and it doesn’t look as though the present incumbent of No.10 is going to be around for too much longer

    The Veteran

    July 6, 2022 at 12:05 pm

    • Vet, on the bright side look at the probable successor.

      MT_Tinman

      July 6, 2022 at 1:40 pm

  3. Apparently, going back to feudalism is all part of it.

    We live in a run-down house that we need to finish renovating; but we decided to just pay it off completely & disengage from the bank early this year, so they have nothing over us. Don’t know if that will be enough, though.

    Lucia Maria

    July 6, 2022 at 5:44 pm

    • Smart move at any time but especially given what’s coming. Looking at various banks I see that their rates have already doubled for loan terms of 3-5 years and I’d bet they’ll push higher. Clearly they don’t see inflation being brought under control until at least 2025.

      Tom Hunter

      July 6, 2022 at 6:10 pm

      • Yes. I’m expecting some sort of debt forgiveness in exchange for something not good, once enough people start going bankrupt, enmasse. Or not – could go either way.

        Lucia Maria

        July 6, 2022 at 6:45 pm


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