Patrick McKenzie+ Your Authors @patio11 I work for the Internet, at @stripe, mostly on accelerating startups. Opinions here are my own. Sep. 06, 2020 1 min read + Your Authors

A thing which I think is counter-intuitive:

Society should prefer materially-greater-than-zero defaults on credit obligations and frequent impairment of / losses on equity.

These are both consequences of positive-sum harnessing of risk appetite. (Profits are also a consequence)

If you were to list social safety net programs in the US by size, consumer credit providers would be up there. That is probably a *deeply* controversial point of view, but it rounds to true: they sign up to take losses ~second in society, after a consumer's savings, in emergency.

(This was brought home for me when writing letters for people who had found themselves in consumer debt trouble back in the day. One was dying, unexpectedly, and would not be able to settle their debt, to the tune of tens of thousands of dollars.)

(I drafted a letter asking for the bank's compassion with respect to their final months / heirs, and am told the bank replied "Very sorry etc etc. We'd be obliged if your heirs could send us the certificate when the time comes to papertrail this. Writing off, naturally.")


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