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So then... The correct way to do this would be to say legally the people who borrowed from you owe you nothing now.

Debt gets erased, lenders get nothing. Everybody wins except the irresponsible lenders.

I'm fine with this. But uhh, feels like people would complain about gov't overstepping it's bounds or picking winners/losers...

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Except the lenders do get something. A massive tax write off.

"The Producers" aside, not paying taxes on money you gave away but didn't get back is not exactly a compelling business case.

Alright, you give me 70k. I can give you back 70k, or you can take the tax write-off for the loss... which one would you rather have?

And if the answer is that you'd rather have the tax write-off I would love to take out a personal loan from you. And I don't imagine you'll be in the lending business for very long.

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