A coalition of activists looking to build popular resistance to predatory lending kicked off a new initiative, The Rolling Jubilee, to challenge the status quo of debt collection by purchasing distressed debts and then—rather than collecting on it—wiping the slate clean.
The Occupy offshoot, Strike Debt, will hold a telethon and variety show called "The People's Bailout" in New York on Nov. 15 to raise money for the cause. For pennies on the dollar ($32 for every $1), individuals or companies can buy distressed debt—including student loans and outstanding medical bills—from lenders if the borrower is either behind their payments or in default. Whereas traditional debt collectors then hound the debtor to pay up, the Rolling Jubilee is bunking the system by erasing the debt and, therefore, liberating the debtor.
Rolling Jubilee, whose website went live on Monday, has already raised over $87,000 to abolish $1.7 million worth of debt. According to writer and Jubilee organizer David Rees, the group has already performed a test run on the debt market by spending $500 on distressed debt, buying $14,000 worth of outstanding loans and pardoning the debtors.
Their stated goal is to raise $50,000 to buy up (and eliminate) $1 million worth of debt, focusing primarily on communities hardest hit by the recession. However, what makes the campaign especially clever is the inevitable exposure of lenders who may refuse to participate. As Charles Eisenstein writes in The Guardian:
If the lenders block debt cancellation even when it comes at no cost to themselves (as they would have sold it at the same price to a collection agency), they appear as a bunch of greedy, vindictive Scrooges.A video produced by Strike Debt to promote the scheme, declares: "We bailed-out the banks and in return they turned their backs on us. We don't owe them anything, we owe each other everything. It's time for a bail-out of the people, by the people."
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.
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.