If the “bottom” 90% of the people owe their debts to the “top” 10% and can no longer generate enough earned income to service them and maintain a decent lifestyle, isn’t default a great benefit to them? Doesn’t the destruction of debt – if properly handled, mind you – create social and economic justice for the vast majority of the people? Or should the 90% keep slicing off pounds of flesh?
Yes, default means that the top 10% will suffer a radical diminution to their accustomed living standards, but is this so bad? To paraphrase: “Where Are The Peoples’ Yachts?”
We are living in a strange world indeed when financial blogs sound like Marxists while actual Marxists ignore the current capitalist crisis. I mean, where are they? Snoozing, apparently.
But yes, if folks simply defaulted and walked away en masse, the impact on the monied class would be enormous.