Can the OWS 'Rolling Jubilee' Liberate Americans From Debt?
Strike Debt's plan is really clever—but there are a couple of things that deserve a second look.
Strike Debt, one of the outgrowths of Occupy Wall Street that has focused on tangible action, has planned a pretty interesting event for this week: The Rolling Jubilee. The plan: Raise money, buy distressed debt, forgive it. Then hope that those who've been bailed out pay it forward by reinvesting in the Jubilee.
Alex Hern explains one principle that could trip it up, using an example of a similar, earlier plan to relieve troubled homeowners of their debt:
The banks have no reason to care what happens to a house after they've sold the mortgage for it, but they do. The best explanation for their stubbornness is that they fear that organisations like American Homeowner Preservation are creating a sort of moral hazard by reducing the penalties for defaulting on mortgages.\n
Matthew Yglesias lends a sympathetic voice to that stubbornness:
The question you have to ask yourself here is "why is this a better idea than just giving money to poor people"? And I think it's hard to answer the question. Given two struggling families, one of which is indebted and one of which isn't, it's not clear why you'd think that the family that's borrowed heavily in the past is more worthy of assistance. And similarly, for any particular indebted family it's not obvious that on a dollar-per-dollar basis debt forgiveness is more helpful than just handing over some cash.\n
His isn't an argument against it, but an argument in favor of really thinking about it and what your motivation is for getting involved.
Elsewhere, the reaction has been overwhelmingly positive: "one of the finest examples, so far, of individual capitalism at work."