NYT: study: cancelling people’s medical debt has no impact on their financial situation

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Economists see inspiring John Oliver segment on debt relief, conduct a randomized trial to forgive $169 million in medical debt, find this has no effect on quality of life or future financial distress at all.

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Turns out the only effect of forgiving people's debts is this discourages them from paying other debts in the future.

Another lesson is that when people self-report that X issue is causing them to cut back on necessities like food they're probably lying.

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An obvious problem with these programs is the only reason they can buy debts for pennies on the dollar is that they're already uncollectable and haven't been paid in years, so forgiveness has a low marginal impact on people's ability to spend.

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A potential harm of trying to scale up a debt forgiveness operation is it only works when the debt is cheap, which it won't be if the market for it increases. And anything that makes bad debt less costly to medical providers nudges them towards producing more of it.

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