UPDATE: as of December 01, 2012
Currently unemployed, but I donated a little - figured I was not driving 60 miles round trip for work, I could give some from my fuel budget. And it was the right thing to do.
Most people in the United States don’t realize that there’s this shadow market for debt. When banks irresponsibly lend money and create these toxic assets, the government has actually stepped in and mandated that they get them off their books. They actually get a tax write-off every time they do it — it’s a mini bailout. Those get sold on the secondary market of debt buyers and treat this part of someone’s life, a little bit of their misery, as if it were a commodity, and they trade it back and forth with each other.
But the trick is that when they sell this debt to debt buyers, they sell it for pennies on the dollar, and that’s what makes this project work. For just $5,000 we can eradicate over $100,000 of medical debt.
|—||Thomas Gokey, one of the founders of Rolling Jubilee, in an interview with TYT from last Friday. Rolling Jubilee is an offshoot of Occupy Wall Street that’s buying and forgiving massive amounts of debt. Watch the full interview here, and tune in to ‘The Young Turks’ weekdays at 7E/4P on Current TV. (via current)|
Occupy’s Rolling Jubilee Wants to Give Americans Money for Nothing
Walking the streets of New York City this spring, you would have been hard-pressed not to come across posters promoting the Occupy Wall Street-led May Day general strike. “A day without the 99 percent,” is how it was billed. With the strike, the group was attempting to light a fire that might bring down capitalism and launch the US into an American Spring. However, Occupy’s rallying cry fell on deaf ears, as the rally had poor attendance and limited impact. Looking back, it seems like that was the moment that the pied pipers of political and economic discontent’s critical mass finally dissipated. The group’s momentum seemed to have run its course, and the fickle media’s attention turned to the sideshow that was the 2012 presidential election.
After May Day, Occupy had to find itself all over again. Call it an identity crisis. But in an organization as decentralized as OWS, where individual efforts and actions are constantly emerging as branches and nodes of a shape-shifting whole, identity is a fluid concept anyway. The post-May Day breakdown was a chance for rebirth—a function of Occupy Wall Street’s built-in eternal recurrence mechanism. It was in this ferment that Occupy forged its next project: Rolling Jubilee, a plan to buy anonymous medical debt, thus offering relief to Americans burdened by exorbitant healthcare costs.
“From the very beginning of Occupy Wall Street, the question of crippling debt that people are forced to carry has always been part of the agenda,” says Yates McKee, a member of Occupy’s Strike Debt team, which is leading the Rolling Jubilee project. “Student debt, mortgage debt, medical debt, and municipal debt—all of that has been a part of Occupy from the very beginning.”
Activists within Occupy Student Debt, an early sub-group of Occupy focused on the debt crisis, had the idea of using Occupy’s I Am The 99 Percent Tumblr to present real people who were debtors and break the silence around debt. It was a issue that was close to their hearts, as many of the original Occupy campers were debtors of all stripes.
As Yates explains it, Occupy Student Debt went on to create the Pledge of Refusal, which many Occupy participants signed. “It wasn’t about forgiveness,” Yates emphasizes. “It didn’t say, ‘Let’s come up with a piece of legislation that forgives our debt.’ Rather, it noted that going into debt is systematic. In order to live, you have to enter into this predatory debt. So the Pledge of Refusal was non-compliant with the debt system. It was similar to a debt strike.”
Originally, the debt strike concept gained a lot of traction within the Occupy movement, but people across the country weren’t ready for such an idea and conditions across the country couldn’t support a mass default. So in the post-May Day void, where Occupy’s idealism finally gave way to reality, they knew they had to take another approach to fighting debt. Luckily, the Occupy Student Debt movement still had a great deal of enthusiasm behind it, even after May Day.
“The only campaign that still had a lot of energy was the Occupy Student Debt campaign,” observes Yates. “So over the summer, we decided to have what we call ‘thematic assemblies,’ where in one assembly we talked about the environment, and in another assembly we talked about labor. And then we did one on debt. And we made sure to invite everyone from Occupy Student Debt, Occupy Universities, Free University, and Occupy Labor.”
The larger assembly then got together and discussed what would it mean to build a political movement around debt in all its forms and not just on certain types of debt in isolation, like student loans. This ultimately lead to the transformation of Occupy Student Debt into Strike Debt, the sub-group which now healms the Rolling Jubilee.
“One phrase we started to use was ‘Debt is the tie that binds the 99 percent’” says Yates. “There is something structural about the debt economy we’re forced to go into in our lives. And this was when we flipped the idea of a debt strike to Strike Debt. What would it mean to strike debt, to attack debt from all these different angles and metaphorically cross it out?”
Occupy describes the vast swaths of America’s debtors as “an invisible army of defaulters.” What if this invisible army were to come out of the shadows and become a political force? Out of this thought experiment came debt memes like “You are not alone” and ultimately the Rolling Jubilee program.
Jubilee, as laid out in the Bible’s book of Leviticus, was a time when debts were forgiven. Strike Debt appropriated the concept in a symbolic way and used it as the namesake for its first major project, in which a fund—financed by donations—buys debt.
Washington seems obsessed with the deficit, and is focused almost exclusively on spending cuts. But new taxes on things like carbon or financial transactions could cover the entirety of the cuts lawmakers say are needed to reduce the deficit.
A carbon tax, for example, could generate $1.2 trillion over ten years, which could,by itself, pay for the entirety of the sequester cuts that will take place on January 1st.
And a tax on financial transactions could generate $350 billion over nine years, which would surpass the projected savings from cuts to Medicare by President Obama last year, which would amount to only $320 billion.
The Rolling Jubilee could influence economic policy as a model for a very different kind of bailout in response to the next financial crisis. The problem of unpayable debts bedevils every corner of our financial system – public, corporate, and personal. So far, the response of the monetary and fiscal authorities to nearly every financial crisis has been to bail out the creditors but not the debtors. Governments and central banks purchase all kinds of shoddy loans from the private sector, but rather than reduce interest or principal on those loans, they merely become the new creditor. The underwater homeowner, the indebted university graduate, the laid-off worker juggling credit cards … they get no relief at all.
The Rolling Jubilee brings a different kind of solution into the public consciousness. The next time a systemic crisis breaks, central banks can rescue the banking system by once again buying the delinquent loans – and then cancel them or reduce the amount borrowers owe. Central banks, with their unlimited capacity to print money, have the power to do this at no cost to the taxpayer. The result would be a release of pent-up consumer purchasing power that had been stuck in debt service. Rising demand would fuel employment, wages, and a broad-based economic expansion.
Would this solution be inflationary? Yes. But a little inflation isn’t necessarily a bad thing, as long as wages rise as fast as prices. Then it is an equalizer of wealth, as the relative value of hoarded wealth shrinks.
Debt cancellation, whether a “people’s bailout” or government policy, is only part of the solution to our economic woes. Deep systemic reforms are necessary, especially given the reality that we are operating a growth-dependent system on a finite planet. But right now, debt is the issue staring us in the face. As always, the most innovative solutions rise from the margins. The Rolling Jubilee may be showing us a glimpse of what is to come.
This is a long post but it’s about something pretty interesting so I hope you’ll indulge …
Like many folks, Occupy Wall Street has been some doing good work in the aftermath of Hurricane Sandy, helping people on the ground.
Now OWS is launching the ROLLING JUBILEE, a program that has been in development for months. 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!
Now, after many consultations with attorneys, the IRS, and our moles in the debt-brokerage world, we are ready to take the Rolling Jubilee program LIVE and NATIONWIDE, buying debt in communities that have been struggling during the recession.
We’re kicking things off with a show called THE PEOPLE’S BAILOUT at Le Poisson Rouge on Thursday, November 15. It will also stream online, like a good ol’-fashioned telethon!
Friends, the line-up is insane. Performers include:
- JEFF MANGUM (Neutral Milk Hotel)
- JANEANE GAROFALO
- GUY PICCIOTTO (Fugazi)
- LIZZ WINSTEAD
- HARI KONDABOLU
- TUNDE ADEBIMPE and KYP MALONE (TV on the Radio)
- members of DAS RACIST
and other great talents including a group of radical nuns! I’ll be playing the role of JERRY LEWIS, emceeing in my tuxedo from MEN’S WEARHOUSE.
This will be a joyful, positive night about people banding together and subverting a predatory financial system in order to help each other. BOOM! That’s a movie pitch right there, goddamn why am I not a Hollywood mogul?!
Anyway, HERE IS THE INFORMATION about THE PEOPLE’S BAILOUT:
- The LIVE SHOW is at Le Poisson Rouge on THURSDAY 11/15, 8 - 11 PM. Tickets are $25 (each ticket buys $500 of distressed debt).
- The LIVE STREAM will be at http://rollingjubilee.org (you’ll be able to donate online)
- Here’s the FACEBOOK PAGE
- The HASHTAG is #peoplesbailout
HOW YOU CAN HELP:
- Spread the word! Share this info with your friends, family, and followers
- Donate money via http://rollingjubilee.org
$25 abolishes an estimated $500 worth of debt
$50 abolishes an estimated $1000 worth of debt
$100 abolishes an estimated $2000 worth of debt
$250 abolishes an estimated $5000 worth of debt
- Host a live-stream party! Get together with folks in your town and watch the show online and donate money and maybe even drink a beer if you’re feeling crazy.
- If you are Jerry Seinfeld or Bill Cosby: Call me about doing a set at the live show! We’ll fit you in.
Okay, that was a really long tumblr post. I feel very vulnerable right now. Thanks for reading.
Debtors are sometimes summoned to court repeatedly, increasing chances that they’ll miss a date and be arrested. Critics note that judges often set the debtor’s release bond at the amount of the debt and turn the bond money over to the creditor — essentially turning publicly financed police and court employees into private debt collectors for predatory lenders.
I don’t care how dire the situation—never, ever take a loan from a payday lender. Put them out of business by not doing any business with them.
In a blistering order yesterday, a county judge in Alabama called enough on one city’s use of a private probation company that passes on fees for its work to people convicted of crimes and then throws them into jail when they can’t pay. We covered this on the show a couple of weeks ago as the unlikely return of debtors prisons in this country, drawing on a long feature in the New York Times. Shelby County (Alabama) Judge Hub Harrington sees the matter that same way. Ruling in a suit against the town of Harpersville, he writes (pdf):
When viewed in a light most favorable to Defendants, their testimony concerning the City’s court system could reasonably be characterized as the operation of a debtors prison. The court notes that these generally fell into disfavor by the early 1800’s, though the practice appears to have remained common place in Harpersville. From a fair reading of the defendants’ testimony one might ascertain that a more apt description of the Harpersville Municipal Court practices is that of a judicially sanctioned extortion racket. Most distressing is that these abuses have been perpetrated by what is supposed to be a court of law. Disgraceful.
Judge Harrington writes that the list of ways in which constitutional safeguards have been violated is too long to chronicle, but he spells out several. Number eight caught my eye: “Defendants interminably held in the county work release program until all fines and fees are paid in full.” In addition to holding folks in debtors prison, he’s saying, they’re also holding them in indefinite work release — for profit. While the case continues, Judge Harrington says he’s taking over the cases of the folks thrown into jail for not paying.
The company, Judicial Correction Services, Inc., promises to help courts cut recidivism and boost their fine collection. The company has offices in Georgia, Alabama, Florida and Mississippi.
Arizona Gov. Jan Brewer has approved legislation making it easier for debt collectors to go after defaulting consumers and small businesses.
Brewer signed House Bill 2664 into law today. The measure allows collection agencies to use final billing statements as a basis to show amounts owed and interest rates as they seek court judgments and wage garnishments.
The bill was favored by debt collectors, which buy delinquent accounts from banks and credit card companies for pennies on the dollar, but receive only minimal information from those sources. It can be difficult and expensive for the collection companies to get additional information on the defaulting consumers and business owners.
Debt collectors’ business model depends on them collecting money from the account holders whose information they buy. The new state law makes it easier on them if they can obtain final billing statements from the banks and credit card issuers.
This law seems uncomfortably close to the kind of legal by-step that allowed banks to foreclosure on homes to which they didn’t hold an actual title, but MERS stated they did:
The language in this bill — primarily, but unofficially, known as the Credit Card Responsibility Bill — that pertains to collection agencies is this:
“In an uncontested court action in this state a creditor may establish the amount of the debt that is owed on a credit card account through a copy of the issuer’s final billing statement or by the electronic record pursuant to section 44-7007 that is maintained by the issuer and that represents the amount owed. In contested actions the court shall weigh the evidence of the parties as required by law.”
Well yes, theoretically, the courts would weigh evidence. But as we saw in the Florida foreclosure courts, judges simply rubber-stamped the bank requests, no matter how egregious or poorly documented their claims. So I wouldn’t count on it.
*The Insanity Of U.S. Military Spending In One Chart*
This chart actually underestimates US military spending. Starting in the Vietnam War, the Military-Industrial Complex in the US began hiding their true spending levels in various budgets outside the Dept. of Defense (DoD). The real expenditures are nearly *DOUBLE* the official DoD figures as explained and tabulated very clearly here:
A new report by an independent government auditor concludes that implementing President Obama’s health care law as intended will make a significant dent in the long-term debt forecast.
The report comes as Supreme Court justices weigh striking some of “Obamacare’s” central provisions — and perhaps the law in its entirety — and as the Republican Party remains committed to repealing the law if it seizes control of government in November.
“[I]f the Patient Protection and Affordable Care Act (PPACA) is implemented as intended it would have a major effect on the [fiscal] gap but would not eliminate it,” the Government Accountability Office wrote in a Monday report — a conclusion in line with its own past research and similar research conducted by other government and non-government analysts.
GAO doesn’t isolate PPACA’s stand-alone contribution to long-term budget consolidation. But it does conclude that if key cost-control measures in the law, and other automatic cuts to Medicare spending baked into current law, are ignored, or overridden by Congress, the implications for the national debt are vast.
If “Obamacare” is implemented as intended, and other measures, such as automatic payment cuts to Medicare physicians, take effect, “spending on Medicare and Medicaid grows from 5 percent of GDP in 2010 to over 7 percent by 2030.”
By contrast, if Congress overrides those provisions, “[s]pending on health care grows much more rapidly under this more pessimistic set of assumptions,” according to the report. “Absent changes to these programs, spending on Medicare and Medicaid under the Alternative simulation grows to over 8 percent of GDP by 2030.”
Congress has consistently passed temporary legislation to prevent Medicare doctors from experiencing a pay cut baked into current law. But the current patch expires on Jan. 1 — along with the Bush tax cuts and the payroll tax holiday — just as other automatic cuts to Medicare are set to take effect as a penalty for the Super Committee’s failure to pass deficit-cutting legislation.
The confluence of these fiscal triggers suggests lawmakers will be forced to act quickly after the election to put the country’s budget on a more sustainable path. But if Republicans win big in November and move ahead with their plan to repeal the health care law, they’ll only make matters worse.
Chart of the Day: The amount that students owe quintupled between 2000 and 2011. For more, check out our MoJo College Guide.
Dear Super Committee: Defense Contractors are “Second to None” In Wasteful Spending
The defense industry is forming a bloc to fight against cuts in national security spending. Here is a reminder that not only is the U.S. spending way more on defense than any other country, but that defense spending is also the source of a lot of government waste.
Read about it on the POGO blog.
Photo from Flickr user melanieburger.