They would all get late fees.
this post was submitted on 14 Aug 2024
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Asklemmy
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Companies like Visa and similar would go out of business with no customers. The government might intervene with bailouts to stop banks from going down. Online shops would start accepting bank transfers (or Venmo in 'Murica) more universally. Crypto would have another hype cycle.
I don't really buy that it would implode the economy, since it runs on all kinds of more tangible things and there's other forms of currency and debt to fall back on, and I also don't buy that the government would seriously enforce against a strike if it had 100% participation - usually just a few percent is election-defining. At most I expect whining and a maybe a few impotent attempts to discourage it before they get the picture.
wage garnishment mostly
Police enforcement. Like when the national guard was sent to break unions.
Not much. You can't spend enough of their money before they stop your spending and start collecting it.
How much credit can you get without a high income or a lot of assets? Hopefully much smaller than your mortgage (which is that the 2008 crisis was about).
Exactly what happens depends on law where you live. Here you'd get a court order: First confiscation of cash or cash equivalents. Second sale of assets, in the end your pay would be garnished. Since not everyone is forced to sell their house (like 2008) the price drop would be smaller but spread across the entire economy.
Unless you're willing to illegally work without a contract and only take cash payments they will get their money back.
Anyone who did not participate in it would have a good time buying cheap stuff in the forced sale.
Jail time.
Now what would be more interesting is if every taxpayer in America stopped collectively paying taxes to the IRS. That'd be some interesting shit. Can't jail millions of people.
There aren’t debtors prisons to begin with. You don’t go to jail for owing on credit card bills.
Yeah but you can still get sued, taken to court and will be in a world of financial hurt so bad that you mind as well have served some time in exchange.
Not even remotely close to being locked inside a box.
Millions of people have credit card debt, sooo...
Hugh government bail out (American here). Taxpayer gets stuck with the bill. Companies loose nothing (probably make even more than way).
FDIC would get the test of its lifetime, but for sure the government would step in to protect the market. Some level of that would come from taxpayers’ pockets.
Pretty sure FDIC (Federal Deposit Insurance Corporation) is for deposits only, not debts. The politicians would never let their donors suffer.
True, I was mainly responding to folks talking about banks going under and people “losing everything.” The FDIC was specifically set up to avoid that happening again.
The financial system would collapse, leading to unimaginable suffering until it is rebuilt again. Tens of millions of deaths in a few years in USA alone.
Sounds like a hostage threat to me.
Really went off the rails in that second sentence
Believe it or not, straight to jail.
Same thing as if everyone stopped paying any type of loans. A shock to the banking system, potentially a collapse if the debt in question is a significant percentage of all debt. Many people would lose their savings.
And no don't hope that bank owners would absorb the debt, they would just liquidate the bank in a bankruptcy wiping out everyone's deposits.
Edit: In most countries there's also a deposit insurance scheme meant to cover cases of bank failure. But it can cover one or two banks failing, not all of them at once.
Remember in the late 2000s when it was discovered they were literally breaking a slew of lending regulations, giving mortgages to people unqualified for them, etc. etc. you can lookup the details but basically they were raping the country’s banks, and then when they were found out, they retired with multimillion dollar retirement packages plus bonuses. And the banks got the federal government to bail them out.
Biggest fucking grift in history and it was not long after the auto industry did the same fucking thing. Again and again this shit happens.
So don’t be under any delusion we could cause any kind of actual consequences to the ultra rich because they’ll just line us up and take the shirts off our backs before they pay a dime.
Afaik they weren't breaking any regulations at the time, we made the regulations in response to what happened. But several of them were lying about their losses, which was illegal.
Many people would lose their savings.
In Germany, everyone is protected up to 100,000 €. So it would actually be a nice reset button where only the rich would "suffer"
That only applies to cash. The rich have the greater majority of their wealth in assets, so they likely won't even give a second thought to losing all of their cash. Who it's actually going to hurt are the middle class workers nearing retirement. The ones who make enough to have some semblance of a retirement fund and who have also moved this fund to cash to reduce volatility.
So it would actually be a nice reset button where only the rich would “suffer”
It would be nice but there's always a way...