Welcome to LSE IQ.
This month we're revisiting an episode from 2023 which asks, do we always need to pay our debts?
It's a question that has come back into focus recently as the UK continues to grapple with elevated interest rates and the lingering effects of inflation,
putting increasing pressure on household budgets and reigniting debates around debt and repayment.
People feel a sense of stigma or shame.
People do not like the sense of kind of finality and admission of financial failure.
I've seen studies where people have gone without food purchases, they've let their health suffer,
they've gone to extraordinary lengths to try to make sacrifices in order to keep paying the bills for as long
as they could before they filed for bankruptcy.
That was Dr Joseph Spooner, an associate professor in the LSE Law School.
highlighting the emotional toll debt can place on a person,
and the lengths some will go to before having to concede they can't pay what they owe.
Now, if we were all, you know, economically rational robots, nobody would do that, right?
They would say there's a bankruptcy law that exists,
the first sign of trouble, I'll just file for bankruptcy.
Why should I make these sacrifices?
But that tends to be not the way that people actually act.
From individuals to governments, borrowing is a fundamental part of our world.
but with a deepening cost of living crisis, for many the burden of debt looks only set to increase.
Welcome to LSE IQ,