I don’t get it... the maximum loss the kid could incur is the cost of a bakupcy lawer and 7 years of bad credit. Honest the smart thing to do is to turn 18 and do one of these highly leveraged yolo bets and then immediately go bankrupt if it goes south. Then you would basically be free and clear by the time you moved out of your parents basement or be filthy rich. This is the kinds of bets you want to take in life, high upside, limited downside and a bunch of idiot Robin Hood VC investors eat the loss
Right - but you're applying the ethical flexibility of a person considering the strategic pros and cons of a financial contract. This is my point: the people propping up the retail markets right now are, to stereotype, less sophisticated than the people selling into those markets. We do not instill "grift VCs" as a value in children.
There was a whole lot of foreclosure in the 2008 crisis. One of the big dilemmas back then was that people were "walking away" from their mortgages. ZOMG the horrah. Why would anyone be so brazen as shirking their moral responsibility to uphold their debts? Because, it was argued, they were simply parties to a financial transaction: in return for paying a monthly fee, they were allowed to live in the bank's house without the bank ruining their credit. When the cost of paying the bank for their house was substantially greater than the inconvenience of having their credit ruined, the rational consumer dropped the keys in the mailbox and paid cash for seven years. There was a peculiar wrinkle up here in Washington, as any bank foreclosing on you can be compelled, upon official court motion, to "produce the note", ie bring the actual paper deed to court. Considering how many mortgages were bought and sold it was potentially worthwhile to stop paying your mortgage, let the bank foreclose on you, go to court and demand that they produce the note. If they did, you were foreclosed. If they didn't, the note was considered lost and you suddenly owned your house free and clear. Took the Republicans about nine months to close that little loophole but it was fun while it lasted. I am all about consumers knowing their rights and their maneuvers. "moral hazard" is just a Republican's way of saying "they aren't doing what we tell them to do." But if you don't take Home Ec you don't so much as learn how to balance a checkbook so I'm not optimistic that the system is going to change anytime soon.
I love the term "Moral Hazard" because it only applies to poor people. If you are hungry and need food stamps tisk tisk tisk "Moral Hazard" why arent you selling you body or scrubbing my floors. If you just lost half a billion dollars in a real estate casino scheme - well clearly thats not your fault and you need a bailout. I almost never use the food delivery apps but every time Uber Eats has a coupon, I use it and remind my daughter that 20% + of your meal was brought to you by stupid VC and Saudi money and it would be wrong not to take their stupid money. Maybe im just weird like that. My wife on the other hand wont take her hard eared unemployment bailout dollars because she believes in that shit dispute the fact that we will be paying it back 10x over the next decade.