Debt strikes: end the slavery

from alternet...

One of the fascinating things about the media dominance of Occupy Wall Street has been how the conversation has shifted away from the deficit-obsession of the last few years. Suddenly the debt that everyone is talking about is personal, individual debt—student loans, mortgages, credit cards and other ways the big banks control our lives.

“That's one of the things, debt really does tie the 99 percent together. Everyone who is under the 99 percentile saw a debt runup in the 2000s,” Mike Konczal, finance blogger and fellow at the Roosevelt Institute, told me. “You can talk about 'the richest 1 percent makes this much money,' but part of what they're making is debt. Their wealth is a claim on everyone else's future income.”

almost 12 years ago, utterly frustrated with the fact that the greater portion of my life up to that point had been saddled with debt of one sort or another, i was finally able to get out from under it - all of it... it was one of the best things i've ever done for myself... now, at age 64, i have no mortgage, no auto loan, no credit card debt, and, in fact, no debt whatsoever... and, other than my truck and 5th wheel trailer, reasonably flush credit union savings and checking accounts, a term life insurance policy and a VERY modest 401K left over from my last corporate job (which has been totally whacked by the economy), i have no assets - no investments, no stocks, no bonds, no property, no precious metals, no valuable collectibles... i maintain one credit card (with a large credit limit and no annual fee) for the considerable amount of traveling i do but it's paid off each month... i never knowingly submit to the ever-present exhortations to "check my credit score" or take actions that would require my credit score to be checked... the last 12 years have given me a sense of economic freedom i used to only dream about...

however...

all three of my grown children (the oldest is 42) are still paying off student loan debt and, to various degrees, can be pretty much described as "debt slaves"... my youngest began a masters program this year and was facing the prospect of putting herself even deeper in hock by taking out still more student loans... fortunately, i'm at a place where i don't have to sit by gnashing my teeth while she does that and i offered to pay for the whole thing, half as a loan at less than half the interest rate she would have to pay to a lending institution and half as an outright grant... (yes, i'm extremely grateful to be able to do something like that...)

since i'm currently in the valley of the doldrums (i.e., back in the u.s. between contract assignments), i have time - too much, actually - on my hands and, once again, i'm exposed to the incessant urgings of the vast majority of the u.s. version of paid advertising to do or buy something on credit, all the while reminding me just how terribly important my credit rating is... it assaults me at every turn with the distinct implication that my credit rating and my ability to incur large amounts of debt is directly correlated with my worth as a human being...

the article is good as far as it goes but what we really need to do is to challenge our belief that credit and the resulting debt is a societal element worth maintaining at all... what it's really time to do is end the slavery...

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Let's have a jubilee - forgive the debtors, the banks have already been forgiven

william greider...

The rebellious citizens occupying Wall Street shock some people and inspire others with their denunciations of bankers, but everyone seems to know what they are talking about: the barbaric and suffocating behavior of the nation’s largest banks (yes, the same ones the government rescued with public money). Right now, these trillion-dollar institutions are methodically harvesting the last possible pound of flesh from millions of homeowners before kicking these failing debtors out of their homes (the story known as the “foreclosure crisis”). This is a tragedy for the people who are dispossessed. For the country, it is a generational calamity.

[...]

There is a solution, and it will appeal to the rebellious spirits occupying Wall Street because it combines a sense of social justice with old-fashioned common sense. It is forgiveness—forgive the debtors. Write down the principal they owe on their mortgage to match the current market value of their home, so they will no longer be underwater. Refinance the loan with a reduced interest rate, so the monthly payment is at a level that the struggling homeowner can handle. This keeps families in their homes, with a renewed stake in the future. It gives homeowners incentive to keep up their payments, because once again they have some equity and the opportunity to accumulate much more.

[...]

Forgiving the debtors is the right thing to do, because the bankers have already been forgiven. The largest banks were in effect relieved of any guilt—for their crimes of systemic fraud or for causing the financial breakdown—when the government bailed them out, no questions asked. The Obama administration followed up with a very forgiving regulatory policy that basically looked the other way and ignored the fictional claims on bank balance sheets. Instead of forcing honest accounting and rigorous reform, the administration adopted a strategy of soft-hearted regulation that banking insiders call “extend and pretend”: extend the failed loans and pretend that the loans will be paid off, even when you know many of them won’t. The phrase originated during the third world debt crisis in the 1980s, when the Federal Reserve rescued the same big banks from insolvency, the result of their reckless lending in Latin America.

greider calls up the historical tradition of "jubilee," a concept david graeber raised in a post i put up not long ago...

The ancient Hebrew society worked out a solution for recurring debt crises—you can find it in the Bible. Every seven years (in some interpretations, every fifty) the cycle of debt accumulation was erased by a declaration of general forgiveness. This was called the year of jubilee, and Christianity embraced the same moral principles (“forgive us our debts, as we forgive our debtors”). Property was returned to the original owners, and children and slaves were freed. Everyone was redeemed. The economy was freed to start over again.

a description of jubilee in the judeo-christian context (from wikipedia)...

The concept of the Jubilee is a special year of remission of sins and universal pardon. In the Biblical Book of Leviticus, a Jubilee year is mentioned to occur every fifty years, in which slaves and prisoners would be freed, debts would be forgiven and the mercies of God would be particularly manifest. In Christianity, the tradition dates to 1300, when Pope Boniface VIII convoked a holy year, following which ordinary jubilees have generally been celebrated every 25 or 50 years; with extraordinary jubilees in addition depending on need. Christian Jubilees, particularly in the Catholic tradition, generally involve pilgrimage to a sacred site, normally the city of Rome.

i like it... i like it a lot...

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