Reading Debt has made me more thoughtful about debt and debt cancellation. Debt cancellation is deeply woven into the biblical narrative, most notably in the Year of Jubilee. In fact, the Lord's Prayer is a prayer of debt cancellation, a Prayer of Jubilee:
Forgive us our debts, as we forgive our debtors.And the debts of the Lord's Prayer are as economic as they are moral.
In light of that, let me point you to something coming out of OWS, the Rolling Jubilee. In the Rolling Jubilee individual debt is purchased by other individuals and then forgiven, Jubilee-style.
Matthew Yglesias describes the idea and effort this way:
How does that work? Well, all kinds of debt gets "securitized" these days. Instead of a bank just lending money and collecting interest, it sells the rights to that income stream as an Asset Backed Security. By buying up a diverse array of ABS you can end up with less exposure to idiosyncratic risk than if you're just lending. But what happens when securitized loans go bad? Well they become "distressed debt" that can be purchased for pennies on the dollar. So in theory you can find a loan with a face value of $100 and buy it for just $15. That's supposed to be a kind of risky investment—a bet that the loan will actually pay off in the end. But the Rolling Jubilee concept is to turn it into a random act of kindness. Just write off the loan!The idea is to donate money so that bad debt can get purchased for pennies and then cancelled. In this way the debt is forgiven, it goes away. You get to "bail out" people the way the government bailed out Wall Street.
Yglesias goes on to ask some questions wondering if this idea--debt cancellation--is better than direct charity, simply giving poorer people the money, or if we should give money to poorer people who don't have any debt.
Those are points well worth making. For my part, my resonances with the Rolling Jubilee are deeply biblical.
Here's a positive review of the Rolling Jubilee from Forbes which also discusses how the Jubilee gets around IRS tax issues.