My point is that if there were absolutely no moral component to the idea of paying lenders back, despite the availability of options that allow borrowers to avoid payment, there would be precious little lending that would take place.
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I’m not sure how you figure that.
First of all, most loans are paid back regardless of any moral component. They’re paid back because the consequences of not paying outweigh the consequences of paying. I’d say precious few loans are made where the lender is counting on the moral standards of the borrower. Lenders know that a certain percentage of borrowers won’t repay them, and that that percentage of borrowers changes as things such as the credit scores of the borrowers and the type of collateral put up change. They charge interest accordingly.
What changed over the last 7 years
wasn’t moral standards, it was lending standards. If you have adequate lending standards, there will be plenty of loans made and enough of them will be paid back that we won’t end up in a mess like the one we’re in.
