"Forcing banks to absorb the losses of this write-off will likely make it harder for the poorest to access credit in the future. Banks are not social institutions - they're pathological profit making entities. They will have no qualms with raising interest rates or denying credit altogether to compensate for the increased risk of doing business with their poorest customers."
In historical terms, this readjustment of lenders to be more afraid that debts will just be forgiven, thus raising the cost of lending, is a deliberate and desired benefit of the debt holiday. Lending to those who can not pay it back is a millenia-old scheme for enslaving (to various degrees in various cultures) those poor people.
"Credit" is not a monolithic good that is either "good" or "bad"; it must be considered in context. "Credit" for an entity that can easily pay it back can be fairly good, and can grease the wheels of the economy, but "credit" to an entity that has no realistic hope of paying it back is not a virtue and not a help. It may feel good in the short term but it helps nobody in the end.
Historically speaking many cultures have acquired a fear of debt, in a long-running cycle (I italicize the word because it is important, it is not an attitude that just pops out of the normal ebb and flow of culture, it is a thing that was learned), as many other commenters are observing. If the modern world starts to reconsider its love affair with debt, it will merely be the most recent turn of the wheel, and we will hardly be the first culture to discover that easy credit can be far more destructive to everybody, from the bottom to the top, than people initially understand.
In historical terms, this readjustment of lenders to be more afraid that debts will just be forgiven, thus raising the cost of lending, is a deliberate and desired benefit of the debt holiday. Lending to those who can not pay it back is a millenia-old scheme for enslaving (to various degrees in various cultures) those poor people.
"Credit" is not a monolithic good that is either "good" or "bad"; it must be considered in context. "Credit" for an entity that can easily pay it back can be fairly good, and can grease the wheels of the economy, but "credit" to an entity that has no realistic hope of paying it back is not a virtue and not a help. It may feel good in the short term but it helps nobody in the end.
Historically speaking many cultures have acquired a fear of debt, in a long-running cycle (I italicize the word because it is important, it is not an attitude that just pops out of the normal ebb and flow of culture, it is a thing that was learned), as many other commenters are observing. If the modern world starts to reconsider its love affair with debt, it will merely be the most recent turn of the wheel, and we will hardly be the first culture to discover that easy credit can be far more destructive to everybody, from the bottom to the top, than people initially understand.