The Morality of Strategic Default
Webcast Q&A: 10 July 2011, Question 2
I answered a question on the morality of strategic default on 10 July 2011. You can listen to or download the podcast of just this question below – or check out the whole episode of Philosophy in Action Radio.
Is it moral to strategically default on your mortgage? Suppose that you could continue to pay your mortgage, but you're underwater: you owe more than the house is worth. You realize that you'd save tens of thousands of dollars by defaulting. Would it be morally wrong to default, assuming that you don't engage in any fraud or other dishonesty in doing so? Would it make a difference if you do that in today's highly regulated market versus in a fully free market?
My Answer, In Brief: Strategic default is morally wrong: it's dishonest and unjust. It's your job in life to ensure that you borrow money sensibly and then repay those loans.
To save the file to your computer, right-click and save the link above. You can automatically download that and other podcasts by subscribing to Philosophy in Action's Podcast RSS Feed:
- Should We Care if People Don't Pay Their Debts? and Is It Okay to Steal From Macy's? by Megan McArdle
- Yes, It's Okay To Walk Away From Your Mortgage and Should You Consider a 'Strategic Default' on Your Mortgage?
- On Bankruptcy at Cornell University's Legal Information Institute; Bankruptcy Exemptions: You Don't Lose Everything and Bankruptcy in Colorado at Lawyers.com; and On Chapter 13 Bankruptcy at the US Courts
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About Philosophy in Action
I'm Dr. Diana Brickell (formerly Diana Hsieh). I'm a philosopher, and I've long specialized in the application of rational principles to the challenges of real life. I completed my Ph.D in philosophy from the University of Colorado at Boulder in 2009. I retired from work as a public intellectual in 2015.
From September 2009 to September 2015, I produced a radio show and podcast, Philosophy in Action Radio. In the primary show, my co-host Greg Perkins and I answered questions applying rational principles to the challenges of real life. We broadcast live over the internet on Sunday mornings.
My first book, Responsibility & Luck: A Defense of Praise and Blame, can be purchased in paperback and Kindle. The book defends the justice of moral praise and blame of persons using an Aristotelian theory of moral responsibility, thereby refuting Thomas Nagel's "problem of moral luck." My second book (and online course), Explore Atlas Shrugged, is a fantastic resource for anyone wishing to study Ayn Rand's epic novel in depth.
I can be reached via e-mail to [email protected].