I’ve been seeing a lot of posts about Rolling Jubilee:
[Occupy Wall Street] is going to start buying distressed debt (medical bills, student loans, etc.) in order to forgive it…. If you’re a debt broker, once you own someone’s debt you can do whatever you want with it — traditionally, you hound debtors to their grave trying to collect. We’re playing a different game. A MORE AWESOME GAME.
I think that’s a fun idea, one that does a lot to undermine the social sacredness of debt — which, all too often, is used to guilt people into paying outrageous fees and interest. And it’s basically Biblical, so you know Republicans will be all for it. (Seriously, though, the Bible was onto something with this.)
Anyway, there are a couple of practical concerns. One is that banks will refuse to sell, once they get wind of the idea, because they don’t want to create “moral hazard.” I.e., they don’t want people taking out mortgages willy-nilly who can’t pay for them. (Suddenly, now, they’re worried about that. When they were packaging them as mortgage-backed securities and selling them around the world… well, never mind. You know all that.)
Another possible problem, if this thing got really big, is that it would drive up the price of distressed debt. That is, right now debt brokers will pay very little for this kind of debt because it usually doesn’t pay off. But if they got wind that do-gooders were willing to pay for the privilege of relieving people’s debt, it might create a whole new business model for them — buy from banks, then sell to OWS… at a markup. That probably wouldn’t kill Rolling Jubilee, but it might make it considerably more expensive and put a bad taste in everybody’s mouth.
Still, it’s a sweet, gentle, loving idea — the kind we need more of. There’s something about the indefatigable humaneness of OWS that commands respect, even if I’m often skeptical about its practical measures.