So, finally it has come: after the banker’s bailouts it is now the turn of the people. Thanks to the Rolling Jubilee initiative from Strike Debt (an offshoot of the Occupy Wall Street movement) debtors in the USA are now having their personal debt wiped out. Yes, you heard right – the magic fairies have moved on from parking meters and are now paying off people’s debt. I love them.
The Rolling Jubilee is quite simply the best initiative I’ve seen in the post-crash era. As I’ve said elsewhere, after a bubble has burst, everyone needs to deleverage and get rid of all that unsustainable debt, not just banks, people too. Sound the horns – this is a people’s bailout!
What is a jubilee?
The Rolling Jubilee website describes the jubilee ‘an event in which all debts are cancelled and all those in bondage are set free’. The concept has its roots in religion and has great relevance to the modern scourge of unprecedented levels of personal and sovereign debt.
My favourite recent example of the jubilee concept is Professor Steve Keen’s brilliantly innovative solution to the current economic crisis and stagnation, where he calls for a modern jubilee on personal debt that involves governments giving money to their citizens instead of banks, with recipients compelled to use the money to pay off their debts, thus enabling them to participate in recovery through future spending. Non-debtors receive the same handout and stimulate the economy through their spending of this money.
How does the Strike Debt programme work?
Put simply, Rolling Jubilee buy up personal debt and then abolish it, thus freeing the debtor(s) from their obligation.
Typically, once a debtor defaults on a debt, the bank or credit card company will eventually give up on trying to collect that debt and sell it on to a collection agency. The bank recovers a percentage of the debt and the collection agency can chase the debtor for the full amount. The debt exists and remains in the system until it is paid off by the debtor. What the Rolling Jubilee does is use donations to the campaign to buy up debt in the same way that collection agencies do, but instead of chasing it they cancel the debt and it is written off. The lucky debtors who’ve had their debt bought by Strike Debt are freed from their liabilities.
A couple of points by way of further explanation: First, when debt bundles are traded they are bought and sold for a fraction of their value, so a few hundred dollars donation can be used to wipe out a few thousand dollars of debt. Very efficient! Secondly, as debt is traded in bundles it’s impossible to target a particular debtor and therefore a bit of a lottery in terms of the lucky ducky who gets their debt written off.
Politicians out-thought by the people
This radical and innovative facility for writing off personal debt and bailing out the people has me genuinely excited by its possibilities. Who knows how far it will go and what it could lead to? If it is astoundingly effective then it could possibly inspire governments to adopt more radical ideas such as the grand scale modern jubilee proposed by Steve Keen. If politicians see improvements in consumer spending as a result of the Rolling Jubilee then they may just be inspired to adopt this idea and bailout their people as a spur to recovery. Given the effectiveness of their solutions to date, they could certainly do with some new ideas. I’m looking at you George Osborne.
One thing the Rolling Jubilee initiative proves is that we cannot rely on our elected representatives to fix things. It is a depressing fact that governments serve the interests of big business, hence the bankers have been bailed out and the people have been left to struggle. There wasn’t anything like the Rolling Jubilee when I fought my own battles with debt and I had to find my own radical solution. But now, thanks to the innovative people at Strike Debt, the people’s bailout is in full swing.
PS. There is a Strike Debt UK movement and you can visit their website here.