magicpony

The Economics and Ethics of Mortgage Default

Mr. Cornelison, you said "By the way, anytime the government offers you money, the collateral is your soul". I have a question for you. I locked in an extremely low interest gov't subsidized loan when I was in law school on a lot of law school debt. I modified it to be a 30 year term. I have the money to pay it back, but I'm not, cause I would never get this kind of interest rate anywhere else and I can get a higher rate of return (even including taxes) elsewhere. I make minimum payments.

Some of my family members are very old school (like you) and they think this is stealing from the gov't... I disagree. I'm making all my payments... haven't broken any laws. I also pay a crap load of taxes (with Social security payments that will, over the term of the loan, easily exceed the loan principal and market interest, the benefits of which (given the crappy state of SS) I don't ever expect to see).

Do you think my decision is immoral?

Is it immoral to engage in legal tax avoidance (for instance selling losing stocks, keeping winners)?

Where do you draw the line, Mr. Cornelison?