As part of the Strike Debt campaign (an Occupy-related debt resistance project), Rolling Jubilee is a new campaign to abolish the debt of the 99%.
The project’s aim (in their own words)
I’ll steal someone else’s words
OWS is going to start buying distressed debt (medical bills, student loans, etc.) in order to forgive it. As a test run, we spent $500, which bought $14,000 of distressed debt. We then ERASED THAT DEBT. (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.)
This is a simple, powerful way to help folks in need — to free them from heavy debt loads so they can focus on being productive, happy and healthy. As you can see from our test run, the return on investment approaches 30:1. That’s a crazy bargain!
There’s also a video about it. Their hope is that the liberated ex-debtors will then contribute more to the fund (the “rolling” part).
How good an idea is it?
On one hand, it’s a simple enough idea to understand, and should have a concrete impact on a lot of people’s lives - good thing!
On the other, it runs a few risks. An increase in the demand for debt may push up its price - it’d reduce debt trading (probably good) but put a spanner in the works of the project (probably bad). Also, as a Guardian article points out, it encourages default - why pay if you’ll get bailed out if you stop?
It also runs a more philosophical risk - why should we pay (via taxes) to bail out banks, and then pay again to bail out ourseves? As a new model obviously it’s great for debtors to be bailed out rather than creditors, but it’s still paying those who helped cause the problem (
by buying the debt off them). A similar idea, but with more teeth, could be people donating to the cause and refusing a similar amount of tax. Strike Debt mob, take note?
They’ve raised almost $350,000 at the time of posting though, pretty fucking impressive.
**edit: Strike Debt’s response**
After posting this, Strike Debt got back to me to correct a few points.
- There’s no chance of them affecting the price of debt as the debt market’s so huge (10s of billion $s) so they’d need to be around 1000x larger to even be noticeable…
- ..though they like the idea of raising the price of debt, as it’d make being a debt collector more expensive!
- Their relative size also means they won’t affect people’s likelihood to default.
- They aren’t buying debt from banks, so they’re not encouraging them in that sense.
Main point still stands though ^_^