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lsparrish comments on Buying Debt as Effective Altruism? - Less Wrong Discussion
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I wonder if one could focus on something that often goes untapped like innate programming ability. Have the person take a test that sees if they can learn to program, and if they can, forgive their debt and enroll them in a program to train them and get them employed.
I don't understand why forgiving someone's debts is necessary for giving a test for programming ability and enrolling him into a training program.
So maybe hold onto the debt indefinitely and offer to forward any repayments to charity? That might work, but it seems like if their income increases later, it might not be as advantageous to forgive it then for tax reasons. Also, there might be a goodwill factor associated with debt-forgiveness that isn't there with repayment. The person may even feel the debt was unjustly accrued (e.g. medical bills for botched procedures) and feel repayment is a bad thing overall.
Is the clock running? Loans are rarely made at zero interest rate, as the time goes by does my total obligation increase?
Also, what is my incentive to make any payments?
How is this relevant to anything?
It could be zero interest, if the primary purpose for holding onto it is to remind the person of their obligation and produce good feelings when they return the favor.
If you hold onto a debt, it shows on your credit report. Paying it off could improve your credit. But apart from that, there's the matter that it is functionally identical to donating to effective charity.
The subjective feeling of obligation with regards to the original debt might affect probability of repayment over time.
Having debt without being in default improves your credit score.
So my incentives to pay off the debt are exactly the same as my incentives to donate to some charity that I didn't pick?