The Rolling Jubilee
(“a buyout of the people, by the people”)
(or, “you are not a loan” [get it?])
(Excerpted from Nick Summers’ article in the SF Chronicle. For more info contact Nick at firstname.lastname@example.org).
The group that brought us Occupy Wall Street is at it again. In an earlier column you may remember the Occupy Your Home movement that blocks auctions and other foreclosure moves and puts people who lost their homes back under a roof.
With a more colorful name, the Rolling Jubilee (dot org) idea is the brainchild of a branch group called Strike Debt (dot org again) whose plan is to solicit contributions and buy someone’s debt and then forgive it. In addition to the cute one-liners in the title above they say “we consider debt the tie that binds the 99%”. Good marketing.
The nuts and bolts are that when debt becomes overdue it becomes cheap. When it gets really, really overdue it sells for pennies on the dollar. So debt becomes an asset in the obscure world of accounting. Strike Debt’s first example was to successfully purchase a $14,000 note for $500, a ratio of 1 (buck spent) to 28 (bucks owed).
That right there is where some critics get off the bus. Whose debt? Whom do you pick to help? Does someone thousands in debt with credit cards get the help? What about a family that is about to lose their home? Or in heavy debt with medical bills? They should ignore those who racked up debt willingly and focus on the poor, they say.
And then the question of how much (or even if) this plan would help the economy. Total debt stands at 11.38 trillion dollars right now (2.7 trillion of that is consumer debt, meaning non-durable goods that don’t appreciate in value like a home does / did, the other 6.68 trillion is mortgage debt) so the Strike Debt stated contribution goal of $1 million is not much of ‘bailout’ even if they target just the mortgage part of that 11 trillion dollar debt.
Ah, and it gets better when you talk about taxes. If a debt is forgiven or written off the IRS considers it income. Yup. Income tax is now due on what the debtor just “saved”.
Google Rolling Jubilee and Strike Debt for more information; there’s a lot out there, both for and against.