Economy & Business

The Corner

What John Oliver’s ‘Debt Forgiveness’ Actually Meant

The Internet loves John Oliver. This is no secret: Visit the front page of reddit the day after one of his “takedowns” to see the denizens of that web page gush over him. And it was no different on Monday, the day after Oliver “forgave” $15 million in medical debt.

In short, here’s what happened. As part of his segment on debt collectors, Oliver formed his own debt-collection company. Through that company, he then bought just under $15 million in medical debt — the debt of about 9,000 people — for $60,000. Once that debt had been bought, Oliver forgave it. Then, in a moment of self-adulation, he showered the stage with dollar bills as a symbol of his good act.

Here’s the thing. Oliver didn’t actually buy $15 million in medical debt, as news stories would have you believe. Instead, he bought the right to collect $15 million in medical debt. The debt “forgiveness” was, in reality, Oliver choosing not to exercise his right to collect that debt.

So no, John Oliver didn’t “give away” $15 million, at least not by any normal definition of the phrase “give away.” And using the term “forgiveness” seems a bit off, too — even a piece that claims Oliver gave away $15 million notes in the second sentence that the debts were “so old they could no longer be recovered in court.” Even if he wanted to collect the debt, he couldn’t, since the statute of limitations on them has already expired. What did Oliver really do? He spent $60,000 to forgo the right to collect $15 million in debt that he couldn’t force debtors to pay in the first place.

Of course, there’s no such thing as free money, and somebody has to cover the $15 million in debt that has gone unpaid (and would have gone unpaid regardless of Oliver’s stunt). As Joe Carter argues, the cost of unpaid debt is passed on to hospitals, who in turn pass it on to their patients in the form of higher taxes, higher prices for care, and higher insurance costs. In fact, those costs had already been passed on to consumers before Oliver even considered “forgiving” the debt.

Oliver’s debt forgiveness sure makes him look good — and probably makes his show’s religious watchers feel good — but it does practically nothing in terms of actual, real-world effects. Let this be a lesson in not taking late-night comedians-cum-TV-hosts at their word. 

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