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A Debt Jubilee Is the Only Way to Avoid a Depression
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Even before the coronavirus appeared, many American families were falling behind on student loans, auto loans, credit card balances and other payments. America’s debt overhead was pricing its labor and industry out of world markets. A debt crisis was inevitable eventually, but covid-19 has made it immediate.

Massive social distancing, with its accompanying job losses, stock dives, and huge bailouts to debt-strapped corporations, raises the threat of a depression. But it doesn’t have to be this way. History offers us another alternative in such situations: a debt jubilee. This slate-cleaning, balance-restoring step recognizes the fundamental truth that when debts grow too large to be paid without reducing debtors to poverty, the way to hold society together and restore balance is simply to cancel the bad debts.

The word Jubilee comes from the Hebrew word for trumpet — yobel. In Mosaic Law, it was blown every fifty years to signal the Year of the Lord, in which personal debts were to be cancelled. The alternative, the prophet Isaiah warned, was for smallholders to forfeit their lands to creditors: “Woe to you who add house to house and join field to field till no space is left and you live alone in the land.” When Jesus delivered his first sermon, the Gospel of Luke describes him as unrolling the scroll of Isaiah and announcing that he had come to proclaim the Year of the Lord, the Jubilee Year.

Until recently, historians doubted that such a debt jubilee would have been possible in practice, or that such proclamations could have been enforced. But Assyriologists have found that from the beginning of recorded history in the Near East, it was normal for new rulers to proclaim a debt amnesty upon taking the throne. Instead of blowing a trumpet, the ruler “raised the sacred torch” to signal the amnesty.

It is now understood that these rulers were not being utopian or idealistic in forgiving debts. The alternative would have been for debtors to fall into bondage. Kingdoms would have lost their labor force, since so many would be working off debts to their creditors. Many debtors would have run away (much as Greeks emigrated en masse after their recent debt crisis) and communities would have been prone to attack from without.

The parallels to the current moment are notable. The U.S. economy has polarized sharply since the 2008 financial crisis. For far too many, the debts in place leave little income available for spending on goods and services or in the national interest. In a crashing economy, any demand that newly massive debts be paid to a financial class that has already absorbed most of the wealth gained since 2008 can only further split our society.

This has happened before in modern times — after World War I, the burden of war debts and reparations bankrupted Germany, contributing to the global financial collapse of 1929-31. Most of Germany was insolvent, and its politics polarized between the Nazis and Communists. We all know how that ended.

America’s 2008 bank crash offered a great opportunity to write down the often-fraudulent junk mortgages that burdened many lower-income families, especially minorities. But this was not done, and millions of American families were evicted.

ORDER IT NOW

The way to restore normalcy today is a debt writedown. The debts in deepest arrears, and most likely to default, are student debts, medical debts, general consumer debts and purely speculative debts. They block spending on goods and services, shrinking the “real” economy. A debt writedown would be pragmatic, not merely a moral sympathy with the less affluent.

In fact, it could create what the Germans called an “Economic Miracle” — their own modern debt jubilee in 1948, the currency reform administered by the Allied Powers. When the Deutsch Mark was introduced, replacing the Reichsmark, 90 percent of government and private debt was wiped out. Germany emerged as an almost debt-free economy, with low costs of production that jump-started its modern economy.

In the past, the politically powerful financial sector has blocked a writedown. Until now, the basic ethic of most people has been that debts must be repaid. But it is time to recognize that most debts now cannot be paid — through no real fault of the debtors in the face of today’s economic disaster.

The coronavirus outbreak is serving as a mind-expansion exercise, making hitherto unthinkable solutions thinkable. Debts that can’t be paid, won’t be. A debt jubilee may be the best way out.

Michael Hudson, author of “… and forgive them their debts” and “Killing the Host,” is president of the Institute for the Study of Long-Term Economic Trends and is Distinguished Research Professor of Economics at the University of Missouri–Kansas City.

(Republished from The Washington Post by permission of author or representative)
 
• Category: Economics • Tags: Consumer Debt, Coronavirus, Debt, Debt Jubilee 
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  1. The boomers will never allow it. They are morally superior you know. They paid their college tuition working during the summer. Totally still possible! They walked to school ten miles in the snow, up hill both ways. They would rather their children and grandchildren wallow in poverty because they see it as a result of character defect.

    They refer to everyone else as feeling entitled. That’s why all the medicare ads to TV talk about the benefits they deserve. That’s how they think. My mother tells me all the time. They deserve everything they have and more. If the young have to pay for it to the extent they have nothing left, so be it. They should have worked harder. Like the boomers did. Or something.

    You xers and millenials have an iphone??? Get rid of that and you can totes have the McMansion and savings and two brand new cars every five years and vacation and pay your student loans, etc. you know those boomers babysat and had paper routes as kids so they are better than we are.

  2. Let’s not kid ourselves: There is no way we avoid a depression.

    One a more practical note, how do you propose to make creditors, many of whom have life savings at risk, whole?

  3. Daniel H says:
    @The Alarmist

    One a more practical note, how do you propose to make creditors, many of whom have life savings at risk, whole?

    Which creditors? JP Morgan, Citibank? Buck ’em.

    • Agree: Rosie
    • Replies: @The Alarmist
  4. Franz says:
    @Homeschooling Mom in NY

    The boomers will never allow it.

    Close but no cigar.

    I’m a boomer and have been arguing for debt cancellation for years. Along with the old European notion of just picking up and paying the tuition of young students in college; the assumption being striving for an education serves the nation no less than military service so treat it the same.

    Another point to keep in mind is that “boomer” is seen as nonsense to most of us. Mill and mine workers, factory workers, foundry workers, literally millions dumped by outsourcing — but you never hear of them/us.

    Say boomer and they just wheel out the same handful of pictures of hippies and yuppies and say that was it, the whole shot.

    I don’t wish it on anyone, but what if one of the current younger generations starts being called “the Antifa generation”? The ones who beat the racist thugs and let in the half-billion migrants?

    Seriously: The media/education establishment can easily do to you what they did to us. And the majority of you won’t have existed at all. Just like most of us.

  5. @Daniel H

    No, the individual retirement and savings accounts into which these institutions sold the securitised share of this debt, not to mention pension funds.

    • Agree: HammerJack
    • Replies: @Svevlad
  6. credit says:

    anyone calling for a debt jubilee is clearly an irresponsible debtor, not a saver. not all of the debt out there was created from nothing, as the Fed does. millions of savers have loaned their earned money to businesses, states and cities, school districts, etc. and would never do so again. in fact, we already have a sort of debt jubilee -it’s called bankruptcy, and it preserves the rule of law while promoting stability and fairness generally. such illogical and immoral ideas about forgiving debt wholesale are almost as bad as the usurers using excess interest as a confiscatory predation. stop this chaotic, immature thinking.

  7. When interviewed post-Bear Stearns murder that started Monday March 10th around 11:00am New York City and ended within one week, the Wall Street veteran Ace Greenberg said ‘what do you do when an avalanche comes at you at about 60 miles per hour, you can’t out run it’? In brief,
    leverage crashed Wall Street in 08 due to Fuld leveraging Lehman 44:1.

    Today, in contradistinction to 08 the dark pool derivatives universe is infinitely bigger and much more prone to mean reversion or all out implosion if deflation enters the calculus.

    The Corporation of the United States of America is officially insolvent and wholly inoperable.

    Everyone has a plan until they get punched in the face. Mike Tyson

    RW

    • Agree: fish
    • Replies: @The Alarmist
  8. Wilson says:

    Strange that countries with surpluses never think of this to take their prosperity to the next level.

  9. Truth3 says:

    Simple.

    Confiscate 90% of the Wealth of the Top 1%.

    Confiscate 80% of the Wealth of the Top 1-2%.

    Confiscate 70% of the Wealth of the Top 2-3%.

    Confiscate 60% of the Wealth of the Top 3-4%.

    Confiscate 50% of the Wealth of the Top 4-5%.

    Confiscate 40% of the Wealth of the Top 5-6%.

    Confiscate 30% of the Wealth of the Top 6-7%.

    Confiscate 20% of the Wealth of the Top 7-8%.

    Confiscate 10% of the Wealth of the Top 8-9%.

    Take all that, and distribute it equally among the bottom 91%.

    Then, watch the Jews squirm, and start over.

    • Replies: @Kim
  10. What is the difference between a “debt jubilee” and a “debt default?”

    • Replies: @nsa
  11. Kim says:
    @Truth3

    Confiscate 90% of the Wealth of the Top 1%.

    Seriously, I would like to hear your definition of “wealth” in this context. Because once you start to define it, you may discover that what you are saying is very silly.

    Do you mean “money”? Do you mean “assets”?

    So we kick a billionaire out of his big home somewhere and then what? What do we do with it? So we say that now all of his artworks and expensive watches belong to the State and then what? Who is that going to help?

    Let’s say that the rich man is Ted Turner, who is said to own 2 million acrres in 11 states. So some body or person is designated to be the owners of that land. Who would decide who distributes this and to whom? And how would the land be used?

    Your suggestion is very poorly thought out and is plainly just weird.

    • Replies: @Cortes
    , @Truth3
  12. @Homeschooling Mom in NY

    Some body has mommy issues. Did your Boomer mommy beat you and lock you in the closet when you were 5? And now that you are nearly 50, you still hate mommy?

    Hey, you bigoted fool, I’m a Boomer and I will personally allow a debt jubilee. Tell your Boomer mom.

    Also, Boomer Michael Hudson will allow a debt jubilee. Tell your mommy.

    Now that that is settled, put down your security blanket, move out of mommy’s closet and stop blaming her and the “Boomers” for your failures.

  13. @restless94110

    Actually I get along fine with both my parents. On AVERAGE, they have a very poor understanding of how things have changed, live in a time warp, and again IN GENERAL, default to thinking that people’s problems are a result of personal failings rather than systemic issues. The arrogance of ignorance in this regard can be darkly amusing.

    The individual exceptions you cite don’t dissuade me of the pattern I’ve come to recognize.

    Your personal “attacks” are ridiculous and don’t address anything I actually said. You seem to be reacting out of hurt feelings. Not a good look.

    Hey, look. The point is over there!

    • Agree: 22pp22
  14. Svevlad says:
    @The Alarmist

    Well, then they should not have been retarded and greedy in the first place

    If you gamble retirement fund, then don’t cry wahwah when it gets fucked

    • Replies: @Sean
  15. nsa says:
    @Bruce Maclean

    “What is the difference between a debt jubilee and a debt default?
    Inflation is actually a slow motion debt jubilee…..but not immoral enough for the learned chigger belt professor, Hudson. What he is proposing is outright theft.

  16. Sean says:
    @Svevlad

    That is a good point, a lot of the pensioners might be dead in a worst case scenario though.

    In fact, it could create what the Germans called an “Economic Miracle” — their own modern debt jubilee in 1948, the currency reform administered by the Allied Powers. When the Deutsch Mark was introduced, replacing the Reichsmark, 90 percent of government and private debt was wiped out. Germany emerged as an almost debt-free economy, with low costs of production that jump-started its modern economy.

    That was intended as punishment of the elite of the previous regieme. They didn’t do it to themselves.

    https://press.princeton.edu/books/paperback/9780691183251/the-great-leveler

    Tracing the global history of inequality from the Stone Age to today, Walter Scheidel shows that it never dies peacefully. The Great Leveler is the first book to chart the crucial role of violent shocks in reducing inequality over the full sweep of human history around the world. The “Four Horsemen” of leveling—mass-mobilization warfare, transformative revolutions, state collapse, and catastrophic plagues—have repeatedly destroyed the fortunes of the rich.

    I think Coronavirus -12 (in this wave at least the second wave in 1918 was spectacularly lethal againd people in the prime of life) would have to have a higher death rate than it actually does to weaken the elite the the extent that would be necessary for them to acquiesce in Hudson’s ‘jubilee’. So unless there is a very nasty October surprise coming, they will still be too strong ,

  17. fish says:
    @credit

    …in fact, we already have a sort of debt jubilee -it’s called bankruptcy, and it preserves the rule of law while promoting stability and fairness generally.

    Might be worth it to pursue this option en masse to achieve a similar result!

    Sorry credit you fucked up…..got greedy

    (While were at it I hope some of you Financial Junior G- Men are watching how this latest round of financial largesse is being distributed! “Claw Back provisions oughta be a something!)

  18. @Robert White

    … ‘what do you do when an avalanche comes at you at about 60 miles per hour, you can’t out run it’?

    Run perpendicular to the flow and get out of the way.

  19. @restless94110

    I have found that the boomer haters do tend to be failures at life. They tend to be fueled by both greed and a sense of entitlement coupled with a work ethic lower than a welfare queen’s.

    • Replies: @Mefobills
  20. FB says: • Website
    @credit

    You obviously have no clue about how the financial system actually works, nor about how a debt jubilee [writing off bad debts would work]…

    First off…all ordinary folks, including ‘savers’ are only going to benefit…as is the entire economy, which desperately requires the financial system to be rebalanced…right now it is nothing more than a Ponzi Scheme that must inevitably collapse…the only question is whether that collapse takes down the entire economy or not…and turns us all into a third world hellhole, as has happened before in many places, including Germany…

    Let’s talk about real facts…back in 2008 Obama talked about rescuing homeowners facing foreclosure…that never happened…instead the banks got 700 billion in TARP money [troubled asset relief program]…that came from the TAXPAYER…

    Simple numbers here…seven million homeowners in trouble could have got $100,000 each…that comes to the same $700 billion…

    Which one would have been better for everyone…?

    This is not to mention the several rounds of ‘quantitative easing’ where the private banks got many TRILLIONS of free helicopter money created out of nothing…all of this has ended up enriching the billionaire class, not small savers…

    Small savers have been mostly ruined for the last decade because of ZIRP…zero interest rate policy which made QE possible…because zero interest is the only way you can have this much debt creation without a collapse…

    And btw…all money is created as DEBT…there is no other way of creating money in our system…so who are the ‘irresponsible’ debtors who are behind the trillions added to the public debt due to QE…?

    The fact is that PCR and Michael Hudson are the only two sane voices to be heard on this unfolding train wreck that is now firmly upon us…what they propose with this debt forgiveness is that the new money which will be created as new debt anyway, is spent on pulling out ordinary folks and vital businesses…instead of simply being placed in the hands of Wall Street banks and billionaires…

    Along with this will come nationalization of major sectors of the economy…including banks…because any rescue money for them will have to mean that government gets equity in exchange…even Trump is saying that…[although it is almost certain that he will not e allowed, by the powerful financial interests, to actually do anything good…]

    So the net result of these measures, debt relief for those families and businesses that need it…plus nationalization of the freeloaders in the financial and other industries that have sucked the economy dry over the last decades, will end up saving the economy…

    Fools like you need some actual education about how things really work…

    • Replies: @credit
  21. A123 says:

    Sorry. This largely dupes my comment to a PCR article, but it actually fits better here.
    _____

    How will a debt jubilee reward financially responsible individuals?

    Warren crashed and burned on this point. (1)

    The audio is a bit difficult to hear, but it appears that the man opens the conversation by saying, “My daughter is getting out of school. I’ve saved all my money. She doesn’t have student loans. Am I going to get my money back?”

    Warren doesn’t even have the grace to praise him for being responsible. Instead, she responds instantly: “Of course not.”

    The man, beginning to be upset, asks, “So you’re going to pay for people who didn’t save any money, and then those of us who did the right thing get screwed?”

    And that’s when Warren’s tin ear and lack of compassion kick in. She smirks, she shrugs, and she says, “No, it’s not anyone got [sic] screwed…”

    “Of course, we did,” says the man. “My buddy had fun, bought a car, went on vacation. I saved my money. He made more than I did, but I worked a double shift for the extra money for my daughter since she was 10. So you’re laughing at me.”

    The minimal criteria to have a chance at passing anything are:

    — Equal cash for non-indebted, responsible citizens
    — $0.00 for the wealthy and non-citizens

    PEACE 😷
    _______

    (1) https://www.americanthinker.com/blog/2020/01/man_confronts_elizabeth_warren_about_her_plan_to_wipe_out_student_loans.html

    • Replies: @Rosie
    , @Adam Smith
  22. swamped says:
    @Homeschooling Mom in NY

    “That’s how they think. My mother tells me all the time”…priceless! Still gets all her encyclopedic understanding of the world from her archetypal Mommy. Thank you, we can always use a good laugh, especially in times of gathering doom. Hopefully, someday the Government will pay all your bills for you & turn America into one big “systemic” Safe Space (from USA to SSA) so you can suck your thumb all day with one hand while taking selfie’s with the other hand. “xers & millenials” (sic) are sensitivity superior you know. They rode to school two blocks in climate-controlled Mercedes’ with the windows rolled up; except on threatening days when it was a little cloudy outside which might have triggered them. Get rid of their iphones??? they’d sooner burn down the McMansion they’re going to inherit – except they’re not allowed to play with matches, much too dangerous. But get rid of that “and you can totes have”(sic) two brand new latest upgraded iphone models every year; so they are superior to anybody with an older version model. No need to send their kids to school as long as they have a new iphone. They would rather their children and grandchildren wallow in self-pity because they arrogantly see everything IN GENERAL as a “pattern” that only they can recognize: so they’re better than you are Boomer, OK??!!

  23. Generally speaking I disagree utterly with Mr. Hudson’s ideas regarding blanket debt forgiveness but now we are living through extraordinary events. The inevitable financial and economic crash is upon us. It’s foundations were laid by the insane policies of central banks, the criminal and immoral greed of the 1% (and their 5% and 10% lackeys), the vapid venality of the political class, and the stupidity of many of the rest of us. The financial collapse and much of resulting economic pain were inevitable but might well have been delayed for a few months or maybe even longer. The catastrophic tragedy is that they have been triggered by a pandemic with an additional catastrophic potential all its own.

    We are facing what Nassim Taleb calls a black swan event, a catastrophic concatenation of events that was literally unthinkable and unforeseen until it happened. Because of this concatenation, the most effective public health attempts to constrain pandemic morbidity and mortality will ceteris paribus wreck the economy and eventually hinder any further necessary public health measures. The economic devastation will almost undoubtedly create social disorder of a magnitude no one living in the USA has yet experienced. This too will hinder public health measures.

    On the other hand, attempting to mitigate the economic impacts of pandemic control by accepting high morbidity and mortality and the resulting overwhelming and permanent damage to the nation’s health care system will just delay the inevitable economic collapse. This too will lead to currently unimaginable levels of social disorder.

    We desperately need to mitigate the effects of the current pandemic. This will impose severe economic hardships on those who can least afford them, the poor, the working class, much of the middle class, and small business owners. These people are going to need financial support from the government in order to survive. They also provide two of the largest engines of the economy, consumer demand and small business employment and demand.

    The devil is in the details. How do we ensure that government money flows to those who need it most and whose use of it will optimally work to restore the economy. One obvious solution is some kind of targeted debt relief. Again the devil will be in the details.

    One thing we don’t want is any more TARPs. If greedy financiers and managers have gotten their companies in financial trouble then any financial assistance from the government should have multiple strings attached: no stock buy backs; no managerial “pay incentives”; strict limits on managerial compensation overseen by the government; partial but real government ownership and/or control of any firms that receive government handouts; targeted forgiveness of corporate debts against individuals and small corporations.

    Above all NO loans to ANY recipient of any past TARP-like government bailout who used any of the bailout money for stock buybacks, increased managerial compensation, or any other scam. These corporations and the sons of bitches who’ve run them into the ground while fleecing the public all deserve to die. F*ck them all!

    • Replies: @Daniel H
  24. there will be no “debt jubilee”. The entire purpose of the present exercise is to

    1) cover up another multi-trillion dollar bail-out of the Jew (((Wall Street))) debt-casino and

    2) liquidate and expropriate white Main Street. Absent dollar-collapse,

    the Third Rothschild National Bank, alias “Federal Reserve” and its Five Fingers

    Goldman-Sachs, JPM, Citibank, Wells Fargo, and B of A

    will wind up owning about 90% of what’s left of the ‘Murkan ponzi’conomy.

  25. credit says:
    @FB

    your entire thesis is based on 2 wrongs becoming one right. for example, since we waste trillions on war we should at least waste trillions on destroying the industrious nature of mankind by making them all dpendents.

    • Replies: @FB
    , @Mefobills
  26. @swamped

    Ha! You know how I know you didn’t read this thread very carefully. Hint: see how many boomers above are talking about “greedy” debters. Those are my parents’ peers. I have young parents btw. And they don’t live in a McMansion. Don’t be so boring and discuss the issue I raised.

    The biggest obstacle to a debt jubilee is going to be folks (like my boomer parents and others), who are obsessed with some moral principle that if they were all bootstrappy, you must be all bootstrappy too. They see a jubilee as theft and anyone with debt as greedy. Just look in the comments above. Just watch that video linked above. This is the thinking in the way of such a plan. And that goes for student debt reform too.

    If this doesn’t include you, or whoever else is reading this, then great. But realize the opposition is a moral/emotional one, not a logical one.

    I’m sorry I even mentioned my mother. It’s just that I hear it from her so frequently. It was just meant to be illustrative. You and the other guy took it way too seriously and/or personally. Sheesh!

  27. FB says: • Website
    @credit

    I see I’m talking to an imbecile…

    Nobody is talking about making anyone ‘dependent’ nor destroying the ‘industrious’ nature of mankind, wherever that particular unicorn may exist…

    We’re talking here about pragmatic measure to REBALANCE the rigged and hopeless broken financial system…try to stop squirting diarrhea until you get your covid meds…

    • Replies: @A123
    , @JL
  28. A123 says:
    @FB

    FB the TROLL,

    Stop your vile trolling.

    I know you are liar,
    you know you are a liar,
    everyone knows you are a liar.

    By they way… We know how you false Prophet Solemani was found.

    Keep worshiping his vulgar display of personal wealth. It publicly marks you as a servant of the IslamoSoros.

    PEACE 😇

  29. JL says:
    @FB

    He makes an interesting point, though. I don’t think you’d be against Americans questioning the vast sums spent on maintaining an empire, while ordinary Americans are suffering. This crisis has exposed vast corruption and mismanagement at Boeing, a stalwart of the empire. The whole thing is that rotten, so why not use the opportunity to tear it down along with other rotting bodies like the financial system?

    • Replies: @FB
  30. Cortes says:
    @Kim

    Hire and incentivise the upcoming generation of brainiacs who would otherwise be hired by the 1% to squirrel away their assets to track down, itemise and tax and if necessary nationalise said assets. Find existing or introduce novel proper, legal means to “squeeze them till the pips squeak” as someone once said. And make sure that the playing field is level by abolishing ALL limited liability partnerships in law, accounting &c. Hammer the enablers, too.

    • Thanks: Truth3
  31. Rosie says:
    @A123

    How will a debt jubilee reward financially responsible individuals?

    Does “responsible saving” pass the Kantian universalizability test? If everyone was a cheap skate, would cheap skates have jobs?

  32. I proposed a debt jubilee in the form of a constitutional amendment about nine years ago:

    https://strikelawyer.wordpress.com/2011/01/15/us-constitution-28th-amendment-jubilee-text/

    Figured we should return to the gold standard at the same time. Figured gold would have to be pegged at an extremely high price, like $30K per ounce. Figured the only debts that wouldn’t be canceled were bank deposits and currency, and that the government would have to insure the redeemability of both.

    Figured the political class would never do it.

    Never got much feedback, other than people who felt they had been more responsible and avoided debt traps and were getting cheated.

  33. JamesD says:

    “Debt Jubilee” is stupid. Go ahead and tell all the people on pensions and everyone with a life insurance policy they will get 50 cents on the dollar if they are lucky.

    And if you don’t balance the US budget, the debt creation will continue.

    Debt Jubilee “treats” the symptoms.

    I’ll say this, the Fed should pump money to people. So if you give everyone $3,000, that’s $1 Trillion. Those in debt can pay off their debt, those who were responsible can save the money.

    Then going forward, outlaw usury, which is charging interest on non-productive loans, like government debt, credit card debt, corporate debt to fund stock buy backs, and student loans. Of course this means governments will have to balance their budgets, people will have to quit buying on credit, CEOs will make less on their options, and student loans will disappear. All good things, but people won’t let it happen.

    • Replies: @Steve Penfield
    , @Mefobills
  34. @Homeschooling Mom in NY

    The boomers will never allow it. They are morally superior you know. They paid their college tuition working during the summer

    Boomers reject the Ten Commandments, the Commandments of Jesus Christ, but they accept abortion, sodomy, usury, unjust wars etc etc and then claim they are morally opposed to debt forgiveness.

    Mr. Hudson is right and by being right he becomes a target of those who do not understand economics

  35. Tom Verso says:

    The Jubilee Fallacy

    I haven’t read Michael Hudson’s book “… and forgive them their debts”; however, he is an internet personality; accordingly, I have read many articles and listened to many podcasts wherein he or others talk about “Debt Jubilee”.

    Generally, the argument for a jubilee is based on historical analogies with the ancient world. However, there are no parallels between ancient Assyria and Greece with contemporary economies. Hudson’s argument, as expressed on the internet, is a fallacious generalization: i.e. ‘ it worked in the past so it will work in the present.’

    The basis of the fallacy is the ‘assumption’ that all debts are the same. He does not differentiate between debts made, for example, to famers for seed corn and fertilizer in the ancient world and contemporary consumer debt for iPhones and SUVs.

    When famers get into debt that they cannot pay back, they lose the farm and the agricultural economy generally suffers. Accordingly, it makes economic sense to ‘forgive the debt’ to keep the famer producing food and the economy as whole benefits.

    Similarly, manufacturing debt forgiveness makes sense if it keeps the factory open and producing and workers working.

    In the ancient world the debt forgivness was for purposes of keeping producers producing for the economy as a whole. Forgiving debt benefited the whole economy and society.

    So far as I can tell, Hudson has not demonststed that forgiving the debts of consumers has the same overall economic benefit as forgiving debt to producers. For example, there is much talk about the ‘poor exploited’ college students in debt for tuition. But, all the money borrowed by the students is greater than the cost of college tuitions. They borrow money for consumer luxuries like iPhones, going to Florida on Spring break, alcohol, drugs, etc.

    Similarly, the parents of the students who can’t afford to pay for their children’s tuition, but drive giant current model SUVs. Should we forgive a student’s debt incurred for an iPhone so s/he can buy on new credit rating a newer model iPhone – on credit? Should we forgive the debt of an SUV owner so s/he can buy with new credit rating a new SUV – on credit? Then what? We forgive the new debt again? On ad infinitum?

    I agree the theory of forgiving debts for productive entities (farmers, factories, etc) should be given serious consideration.

    But, what is the moral and economic justification for forgiving none life essential consumer entertainment and self gratification debts Mr. Hudson?

    • Replies: @Mefobills
  36. An excellent point! But as I note above, we are living through truly unique and extraordinary events. Once unthinkable solutions may be necessary.

  37. @A123

    How will a debt jubilee reward financially responsible individuals?

    It won’t.

    It will punish those who lived within their means while rewarding debtors for their reckless and/or foolish behavior. All the new debt they conjure out of thin air will punish savers by further devaluing the purchasing power of their savings (again). It will punish workers who will have to pay more for a loaf of bread and rent. It will punish contractors and businesses who will have to charge their customers more for the same goods and services. It will punish those customers who will have to pay more for those same goods and services.

    It won’t punish lenders who made bad loans. (The “lenders” never loaned anything in the first place. They simply extended credit with a bookkeeping entry in a database that is backed by the Federal Government good faith and credit of the taxcattle.) It won’t punish the colleges and universities who scammed these kids into getting useless overpriced bullshit degrees. (The only punishment they will receive will be the erosion of the purchasing power of their ill gotten gain.)

    It will not punish the central bankers who created this mess with their policies or the “government” that borrows and spends like a drunken retard. It will not punish the congress critters who thought it such a wonderful idea that the “government” guarantee all these student loans thereby driving the cost of tuition into the stratosphere.

    It will encourage more reckless borrowing and debt creation.

    It will create understandable resentment among people like the gentleman in the video you posted and further divide the people.

    People do not understand how truly horrible a debt based fiat currency is for society.

    But hey, when everything costs more GDP will reach new highs…
    And the village idiots will rejoice.

  38. Mefobills says:
    @credit

    your entire thesis is based on 2 wrongs becoming one right.

    FB is correct.

    Think of the money supply as having negative and positive in it simultaneously. Or another analogy, would be a tank filled with water and there are bubbles in the water.

    The water in the tank is the money in supply, and bubbles are debt instruments. There is a ratio of debt to money in supply. Too many bubbles is too much debt.

    When money goes on to pay off debts, by paying down loan principle there is an implosion. Both the money and the debt claim disappear from reality. What came from nothing returns to nothing.

    The debt jubilee finds bubbles that are making bad claims. In other words, bad debts are being defined, so they can be erased from existence. PCR and M. Hudson have described the bad debts that should be targeted. Erasing bad debt then changes ratio of bad debts to good debts, and it changes ratio of debt to money.

    To reiterate, a handy way to view a debt created money supply with your new glasses, is to see it as a tank of water with bubbles, and there are bubbles that are undesirable – maybe they have a different color.

    If you want to extend the analogy, there are public debts and private debt created bubbles. Public debts create EVERYBODY’S SAVINGS.

    Erasing the public debts would erase people’s savings, so that would obviously be something you wouldn’t want to do.

    You cannot in good faith make an argument that bad debts are somehow beneficial. That sort of argument is akin to saying that cancer is beneficial.

    Classical economics is the only type of economy that can discern what is cancer, sinew, bone and energy in an economy.

    Bad debts polarize the economy, and kill the host.

    If you examine “Western Economies” as I have, you can easily discern a pattern, where commodity prices plunge because there are no buyers due to lack of liquid available money (M0, or M1). Loan formation (which creates new bank credit) is low. Velocity is low.

    The western economies operate on a debt cycle is that is about 50 years, where there is a time of destitution and a time of plenty. Destitution follows almost always with war. Commodity prices are a good vector for destitution.

    Basically, if man does not get a handle on the debt problem, and his invention of “money” then he is doomed to periodic wars, polarization of economies into haves and have-nots, and creation of predatory finance plutocracies.

    • Replies: @FB
  39. @JamesD

    Mr. Hudson – nice article. Totally agree on the concept of a Debt Jubilee. Surprised that an establishment newspaper like Washington Post would allow something so sensible on their pages. That’s encouraging.

    James – your grumbling about a Debt Jubilee is misguided and probably self-serving. Who’s the bigger fool: the inexperienced student who took on a loan they now can’t pay off, or the adult “investor” who offered unsecured credit to a young “slacker” in the first place?

    If you and other pensioners knowingly QUIT YOUR JOB in hopes of endless fiat counterfeiting carrying you into the sunset… whose fault is that? Certainly not the students. (I’m 50 and have no college debt, by the way.)

    As to those who cling to the right-wing argument of a “sacred contract,” I’ll remind you that coercion generally negates any contract. Students are now faced with a mandate from corporate HR that you must get a college degree to land almost any professional job, and the soaring cost of college (thanks to fiat counterfeiting) makes college often unaffordable without a loan.

    Students aren’t totally innocent here. But greedy bankers, witless college administrators and gullible ‘oldsters’ are much more to blame. A Debt Jubilee would clean out decades of financial corruption that is strangling our economy. The laternative is long-term debt slavery, which all of the above apparently prefer.

    • Agree: Mefobills
  40. Mefobills says:
    @Tom Verso

    Generally, the argument for a jubilee is based on historical analogies with the ancient world. However, there are no parallels between ancient Assyria and Greece with contemporary economies.

    You are right… that argument hasn’t been well vetted. But, the pattern persists.

    Polarization happens whether it is a debt based money system, or even if it is a gold system. Gold is dug out of the ground, and then monetized when it gets the king’s stamp. So, gold coin era was not one of debt created money, yet there was polarization with debt mechanics.

    In gold era, debts still caused polarization and war. For example, the wars between Persia, Babylon and Greece were all due to unpayable interest on gold loans. There wasn’t enough gold to pay exponential claims payable to creditor, so the inevitable result was war.

    Contemporary economies are rife with the debt problem. Mercantile countries would export excess goods, to then grab another countries gold, to then have “extra” to pay debt claims.

    In the most recent American times, you can discern the pattern with commodity prices.

    1764 Prices high and times are good.
    1775 Destitution, low prices
    1814 Prices high boom times
    1843 Destitution, doom, depression low prices
    1864 In the North … High prices, boom times.
    1896 Destitution, low prices
    1920 High Prices good times
    1933 Destitution, low prices
    1980 High prices
    2008 Low prices

    OK, so maybe it is not exactly 7×7 = 49 years in biblical terms, but the pattern in the modern era persists.

    During destitution times, the creditor HARVESTS the debtor. This is how the debt clears. It clears with a HARVEST, or it clears with war.

    Harvesting is when a debtors land, patents, other property, or whatever can be grabbed and transferred to the creditor. What was a money derived debt instrument, is canceled with transfer of real wealth. OK?

    The harvest phase happens during destitution, which is how modern economies clear debts.

    War to clear debts is another mechanism, where NEW PUBLIC DEBTS are created. These public debts pay private debts.

    Private debts are generally much worse than Public Debts.

    China has public banks, and hence they have debt instruments housed in said bank, which in turn makes it much easier to erase by law, than in the west.

    In the West, debt instruments are dispersed and in the hands of bond holders, who have become plutocrats.

    Money’s true nature is law.

    • Replies: @Tom Verso
  41. Truth3 says:
    @Kim

    Go back to Korea Kim-chee. Take your dogmeat with you.

  42. Mefobills says:
    @JamesD

    James… there is a lot to unpack here.

    Debt Jubilee” is stupid. Go ahead and tell all the people on pensions and everyone with a life insurance policy they will get 50 cents on the dollar if they are lucky.

    It is do or die. You have to erase unproductive and negative debts.
    Think of it like a parasite sucking your life energy. A healthy body ejects its parasites, so it can live. None of us enjoys having invisible hands in our pockets, where said hands are cupped around our testicles giving them an uncomfortable squeeze. Bad debts pick our pockets, or in other words, transfer life energy to grifters and parasites. In larger economic terms, the bad debts cause prices to go high, or manifest in ways that “transfer” wealth.

    And if you don’t balance the US budget, the debt creation will continue.

    Public debts are the peoples savings. Sorry everybody, that is just how it is in a debt based money system. The US government is NOT A HOUSEHOLD. Don’t conflate U.S. budget with how your check book operates.

    Ideally, U.S. Treasury would emit the money that we use in the form of debt free, and loans, and channel the new money into the commons, as Canada did 1938 to 1974, but we don’t have that. To have that, would have to undo everything that Woodrow Wilson did to undermine the country.

    Debt Jubilee “treats” the symptoms.

    It treats the “excrescences” that which is unnecessary to production. Eliminating bad debts is something akin to eliminating cancer.

    I’ll say this, the Fed should pump money to people. So if you give everyone $3,000, that’s $1 Trillion. Those in debt can pay off their debt, those who were responsible can save the money.

    You can pump money to the people in check form. The check is a bill (like a MEFOBILL) that defines who the payer, payee and drawee is. IN other words, you can define on the bill, that the new money only goes on to pay off debts. The new money then disappears simultaneously with the debt instrument, and there is no price inflation. The producing side of the economy is unleashed.

    Steve Keen has good ideas on how a debt jubilee can operate, and is similar to what you are suggesting.

    https://moneyweek.com/445572/steve-keen-interview-debt-jubilee

    Then going forward, outlaw usury, which is charging interest on non-productive loans, like government debt, credit card debt, corporate debt to fund stock buy backs, and student loans.

    Usury is more than just interest on loans, it is a power relation where one party is extracting from another. This extraction can be in the form of interest, prices, or transfers. You are correct in that these particular types of debts are usurious.

    Unfortunately, modern man has redefined usury from its historical meaning. By changing the definition, it gives cover for rent seeking and “takings.” One particular in-group is an agent for mammon and if you follow (((him))) then you can see where and when the redefinition takes place in history.

  43. @The Alarmist

    Give all private creditors 60 days to present the Treasury proof of the debt owed, then direct the Federal Reserve to credit the Treasury with sufficient funds to pay off the entire national debt, via direct deposit to each creditor’s bank account. There is your Jubilee: effectively increasing money in the pockets of debtors, increasing money for investors (the former creditors) to invest in businesses to meet the increased consumption fueled by the debt forgiveness. Fair to all, and a macroeconomic balance of supply and demand increases, mitigating or eliminating inflation due to the Jubilee. Win-Win.

    • Replies: @The Alarmist
  44. Mefobills says:
    @credit

    we already have a sort of debt jubilee -it’s called bankruptcy, and it preserves the rule of law while promoting stability and fairness generally.

    See my previous comments above about Harvest phase. Bankruptcy can be a good thing to shield from predatory creditors, but if it is used to systemically harvest the economy, it is a bad thing.

    Banksters can do something with “call loans.” This action accelerates the destruction of circulating credit (Mo or M1), which then brings on a debt cycle Harvest phase.

    During Harvest, Creditor gains the real created wealth of debtor.

    Before Civil war, the European banking system (out of London) was wanting to put the South and West of America into debt, to then do a harvest, to then transfer the South and West back into the Colonial System.

    The Colonial system would then have converted the South into an extraction economy (similar to what was done to Russia in the 90’s), using negro labor. The U.S. would have been undone.

    I don’t think people really get just how fearsome the money power is.

    It is the most fearsome power.

    Money’s true nature is law, and law can be codified in advance to be moral. (Noahide laws are immoral and shield for the usurer.)

    Morality in turn demands that we address the excrescences that bad debts represent.

  45. Mefobills says:
    @The Alarmist

    Let’s not kid ourselves: There is no way we avoid a depression.

    Depressions are easy to avoid. Unfortunately our political class are paid-off clowns, knaves, and fools – so they will not take the necessary steps to avoid depression.

    One a more practical note, how do you propose to make creditors, many of whom have life savings at risk, whole?

    That is also easy to do. The real problem is knaves, clowns, and fools in our ruling hierarchy who do not have the base knowledge or understanding to discern what is productive and unproductive.

    People who have life savings, which in turn represents their life energy may have said savings invested in the economy. Their savings may be in the form of a debt instrument of some sort.

    This debt is NOT A HYPOTHECATION DEBT.

    Debts that were used to hypothecate money are generally lodged on bank ledgers, so its “location” in the economy can be discerned, to then protect life savings debtors.

    Figuring out productive vs unproductive debt can be done most easily by nationalizing the banks, and then examining the ledgers. The bank can be spun out later to be re-privatized after the ledgers are fixed.

    Keen’s methods do not require nationalization.

    (I don’t believe private banks are a good thing… but that is my position.)

  46. Tom Verso says:
    @Mefobills

    Thank you for your cogent extension of the discussion. Your 1764 to 2008 cyclical history is fascinating. Also the concept of “Creditor Harvesting’ is a great characterization and concept. I will use it in future discussion I’m sure.

    I think that Hudson’s value is that of opening up of the discussion about the role of debt and economics. However, Hudson is positing a theory, but so far as I can tell, he does not posit a specific economic policy or practice. How exacting will the debt forgiveness take place? Will the government simply by edict say creditors have to cancel their claims or will the government buy up the debt instruments and then cancel them?

    I think an earlier and much more cogent work on the subject is E Michael Jones’ “Barren Metal … A History of Capitalism as the Conflict between Labor and Usury”. However, he has been Black Listed by the ADL and SPLC people for alleged anti-Semitism. So I don’t expect we will hear much about his work.

    • Replies: @Mefobills
  47. FB says: • Website
    @Mefobills

    You cannot in good faith make an argument that bad debts are somehow beneficial. That sort of argument is akin to saying that cancer is beneficial.

    Excellent explanation Meef…as usual…

    However, I fear your knowledge and insight into how things actually work are well beyond the grasp of indoctrinated fools who basically react completely knee-jerk, like Pavlov’s conditioned dog begins salivating as soon as he hears the dinner bell…

    Another analogy I would use is physics…where the science of mechanics explains the nature of bodies in motion, which is very much like what you are doing here with your explanations about finance…

    Obviously this will fly right over the heads of ignoramuses that know not the first thing about either mechanics of physical objects, nor the mechanics of how finance actually works…

    I salute you for having the patience to put up these very detailed explanations though…it will stick with people who decide to think…the rest aren’t worth considering…

    • Replies: @Mefobills
  48. FB says: • Website
    @JL

    I’m not understanding your comment…I agree with everything you say…

    This crisis has exposed vast corruption and mismanagement at Boeing, a stalwart of the empire. The whole thing is that rotten, so why not use the opportunity to tear it down along with other rotting bodies like the financial system?

    Yes…let’s review that case briefly shall we…?

    So now Boeing is asking for a 60 billion dollar ‘bailout’…

    And Trump is going to give them that…right out of our very own pockets…

    So how is this not ‘rewarding’ deadbeats, as some fools are screaming stupidly here [when the issue is for ordinary folks instead of the corporate elite to get some relief…]

    We know already that Boeing has in the last few years spent 44 billion dollars to buy back their own shares…[as have most big corporate fat cats, due solely to the massive amounts of money printed under quantitative easing, whose sole purpose was to make this helicopter money available to goose the stock market by means of these share buybacks…]

    So why not just say to Boeing now to sell those shares that they bought…plus some more, and then they would not need taxpayer money coming out of our pockets…

    But no…they get to first eat their cake, and then we the people have to buy another cake for them…

    The fact is that a debt writeoff for ordinary folks who are for instance underwater on their home mortgages, or swamped by student debt or medical debt [yes, literally thousands of people are ruined each year by unpayable medical debt]…would have a hugely positive impact on the economy because those people with unpayable debts would now be able to consume again…consumption being the main driver of the economy…

    How is giving Boeing free money going to stimulate economic activity…?

    It is simply CORPORATE WELFARE…a huge problem in our economy…

    The simple fact is that the corporate and financial elite are getting big time socialism…they simply get whatever they want from the govt…it is they that are welfare queens and totally ‘dependent’ on govt handouts…

    Where is Boeing’s ‘industriousness’ one might ask…?

    The people running that company have practically destroyed its reputation with one of the biggest engineering disasters in human history…the 737 MAX catastrophe…

    That is not very ‘industrious’…not even by the definition of the entire engineering corps at Boeing, who have watched with alarm and dismay as the company has been turned into a complete financialized joke…

    Here is what the ‘geniuses’ with MBAs told the Boeing engineers some years ago after they got hald of the company reigns following the Mcdonnell Douglas merger…building airplanes is just like building any other product…like a toaster say…

    Well guess what…that’s not the case…toasters don’t need to fly people safely around the world…they only need to warm up sliced bread…

    So these are exactly the kind of human qualities our system is rewarding with free government money…ie completely brain dead morons that should not be running a lemonade stand, much less an aerospace concern…

    The parasites on wall street are even worse…the entire US economy is simply a Ponzi Scheme that now has one foot in the grave…

    It’s not even a discussion of WHO deserves to be helped anymore…it’s simply a question of how do you now save this house of cards from collapsing…and the only way to save this thing is with the measures that both Prof Hudson and Paul Craig Roberts are suggesting…there is simply no question about that…

    Unfortunately, I doubt this will ever be allowed to happen…for the simple reason that government policy has been long ago captured by the super wealthy oligarchs that will rather crater the economy than give up control…

    • Agree: Mefobills
  49. Mefobills says:
    @Chris Mallory

    I have found that the boomer haters do tend to be failures at life. They tend to be fueled by both greed and a sense of entitlement coupled with a work ethic lower than a welfare queen’s.

    Boomers unwittingly failed at the generational prerogative. The generational prerogative is to make things better for subsequent generations. Boomers failed at generational prerogative. Deal with it, these facts are indisputable.

    If you “harness” and extract from your kids, that is pretty far gone over into the nasty and depraved category. There is no question that on average, there is a generational war, where the old are extracting from the young. It most cases the old are doing things unwittingly. They have been programmed with false narrative.

    If the young cannot form families because housing is too high priced, and if the young cannot get educations, and if “finance capitalism” has off-shored good jobs, then they have every right to be incensed.

    The young have been cut-out of life, through no fault of theirs. They are looking for something to blame, and duped boomers are the target.

    The real target is usury mechanisms, and ((certain types)) that predate the boomers. However, millennial and the younger gen Z kids have poor glasses on their noses, and cannot see things. They don’t have the knowledge or vision because it was never taught to them.

    I’m going to go with the boomers are a duped generation, who have lots of false notions rattling around in their mostly empty noggins. When you get old, your brain becomes calcified, and it is difficult to impossible to re-write narrative, so they react poorly when confronted with OK-Boomer.

    The “greatest” generation that preceded the boomers, was also viciously duped.

    Gen Z and Millennials – don’t be the dupes that your forefathers were. Read Hudson and PCR and even myself, and learn quickly in order to survive.

    • Replies: @Chris Mallory
  50. Mefobills says:
    @Tom Verso

    However, he has been Black Listed by the ADL and SPLC people for alleged anti-Semitism. So I don’t expect we will hear much about his work.

    Tom,

    I am a proud anti-semite. If you are a monetary historian, then you cannot help but notice the nefarious practices of our Jewish friends.

    That said, I do admire the Jews who become self aware, and walk away from the tribe – or especially those who actively fight against their usury mechanisms.

    These types of people are my heroes. The rest… well feel free to blast away, because they are operating the usury mechanism and screwing over whole civilizations.

    Glad you read Jones, he also is pretty accurate and circles above the target.

    • Replies: @Tom Verso
  51. Mefobills says:
    @FB

    I salute you for having the patience to put up these very detailed explanations though…it will stick with people who decide to think…the rest aren’t worth considering…

    I actually write for people like yourself who do have the capacity to understand. You will go on to pass knowledge, and it will pass on to others and so on. Not everybody is stupid and depraved.

    Hudson et al are doing us a signal service.

    All of life is a distribution curve. Some people for whatever reasons cannot “get it.” You can get mad at them, as that is like being mad at a chihuahua for barking. Keynes would call the chihuahuas as “cranks.”

    (Those that cannot comprehend things are why universal suffrage voting is stupid beyond belief.)

  52. @Mefobills

    Just another of life’s failures whining because life is hard. Grow up, put on your big boy pants and quit whining like a little bitch.

    • Replies: @Rosie
  53. songpoet says:

    preachers go on ’bout babylon and the so-called “captivity,
    but they only brought rich jews; that seems strange 2me.
    when the persians said: “y’can all go now, 
                                              most of them hebrews stayed.
    perhaps they were busy learning how 
                                                      unearned money is made.
    the talmud art and shylock shark of fractional reserves;
    and derivatives which gives Mammon to the god it serves.

    they sent the talmud with hillel on to the phar-isees
    to scam the elders of israel into re-pealing Ju-bilees.
    in a Jubilee year, most debts got clear, so nobody got too rich,
    it ain’t healthy to get too wealthy, or broke as a son of a bitch.
    Usuries kill economies, but Hil-lel convinced them how
    ex-po-nential debt be kept; that’s the mess we in now.

    • Thanks: Mefobills
  54. Rosie says:
    @Chris Mallory

    Just another of life’s failures whining because life is hard. Grow up, put on your big boy pants and quit whining like a little bitch.

    Is there any protest against any sort if injustice that cannot be answered this way by the beneficiaries of the status quo?

    If a debt jubilee were to take place in the teeth of plutocrat opposition, and Chris Mallory whined about it, could Mefobills not tell him to put on his big boy pants? It seems to me he could, and perhaps he would be right…or not.

    In any case, it seems reasonable to keep the discussion focused on the merits rather than personal attacks.

    • Replies: @Mefobills
  55. Mefobills says:
    @Rosie

    Is there any protest against any sort if injustice that cannot be answered this way by the beneficiaries of the status quo?

    Rosie,

    The Mallory sort of response is typical. Plutocracies, which are beneficiaries of the status quo, will need to be smashed with force. Their hands have to be ripped from the tiller. If one is benefiting from rents and unearned income, then the weaker minded types benefiting from rents, will make up excuses. Or, they will level allegations like “big boy pants” in order to deflect.

    They will even create religions that make them “special” as a sop and cover, so they can continue with their rent extraction.

    I’m a boomer, and when I have discussions with my fellow boomer types in person, they usually cannot stand the incoming fire. Their usual responses are they get mad at me for forcing them to confront unpleasant truths, or they clam up. Sometimes they actively avoid me, to go to their “safe space.”

    For the most part, my fellow boomers are simpletons who since birth have been duped with false narrative, and are too old now to come to grips with actual reality.

    Of course, there are always exceptions, and these people who can see things clearly, are always a joy to be around.

    All of life is a distribution, and you can statistically classify a population.

  56. jasmin says:

    Rewarding bad behavior and punishing good behavior is not the way to go. In other words if you paid off your student loan obligations you are a chump. If you paid down your mortgage, again you are a chump. A debt jubilee is nonsense. We are not living in biblical times where the structure of those economies might have made debt jubilees practical.

    People must take responsibility for their actions. People should have debts forgiven only in extreme circumstances that were beyond the control of the individuals. People who lived beyond their means–taking vacations, purchasing home entertainment centers, having destiny weddings, attending private universities instead of less costly state universities, and taking majors that are less likely to result in finding a jo ob, enjoying spring vacations in Can Cun and similar locations–should not be bailed out or be forgiven their debts. They should grow up and take responsibility for their actions

    • Replies: @strikelawyer
    , @Mefobills
  57. Tom Verso says:
    @Mefobills

    Yes of course I agree with everything you say. Most especially:

    “I do admire the Jews who become self aware, and walk away from the tribe”

    And very most especially Ron Unz. A man I revere as an intellectual, entrepreneur and social activist.

    • Agree: Mefobills
  58. @jasmin

    Jasmin, you certainly are embodying the most common objection to the jubilee idea.

    They’re having quite the discussion about this very thing over at the Vox Day blog. You might find that interesting.

    I don’t agree with you at all, of course. The jubilee is necessitated by the monetary system. The injustice of it is there, but other injustices are worse.

    There’s a lot of blame to go around. The people most to blame are all long dead and gone.

    I tried to deal with your objection quite a while back:

    https://strikelawyer.wordpress.com/2011/01/15/amending-the-constitution-the-jubilee-amendment/#comment-410

    It keeps surfacing from elsewhere, though.

  59. Mefobills says:
    @jasmin

    Rewarding bad behavior and punishing good behavior is not the way to go. In other words if you paid off your student loan obligations you are a chump.

    Steve Keen’s debt Jubilee rewards everybody equally, overcoming your objections.

    This idea of paying debts owed is probably evolutionary. Small tribes of people evolved with face to face relations, and if you didn’t pay what you owed, you would lose face, or be ostracized. People in small tribes simply remembered who they owed what, and they discharged debts with services or paying back however they could. At the end of the day, if there were debt deadbeats, they were taken care of… sometimes not nicely.

    Medium sized tribes started recording who owes who what. The clay tablet record is mostly one of debts and credits.

    The money system of today is impersonal, and not part of our small tribe evolutionary history. The advent of large cities and civilization and money systems, has allowed rubes and charlatans to silently steal from our pockets, creating “loan obligations” to them. Making debt claims so outrageous, they would probably be murdered in a small tribe.

    Put another way, debt obligations heaped on the students back are usurious. The system has been gamed to extract from the vulnerable. The student has exponential growing debt obligations heaped on his back, which then extracts his life energy, and meanwhile the education complex has become temple-like and gilded to then reward mostly boomer liberal college professors.

    Keen’s jubilee rewards everybody equally. This is because most people cannot overcome their evolutionary programming. I got mine and I followed my programming by being honest and playing by the rules!

    In a version of Keen’s jubilee, if you are not in debt, your “check” has to go on to buy stock in an in-debted company. This then pays down corporate debt (to the bank) and company stock transfers to you. The companies are prevented from doing stock buy-backs themselves to then stop self-serving executives from pushing their own stock price options.

    Indebted college students and others use their jubilee check to pay down mortgages/loans.

    In all of these cases, the “checks” go on to pay down debt, and hence the money disappears – there is no price inflation.

    The composition ratio of debt to money in money supply changes to “more money” relative to less debt claims, and hence the producing side of the economy is released somewhat from debt servitude.

    Remember, when civilizations grow unstable due to plutocracy, war and revolt is the inevitable result. Even the fall of Rome and the onset of the dark ages, was due to a creditor class becoming plutocrats.

    You won’t be worried about how you played by the rules in the past, when civilization breaks down and the bullets are flying.

    • Thanks: Mr McKenna
    • Replies: @strikelawyer
  60. @Mefobills

    At least Keen understands that at some point a jubilee is necessary. I had a few correspondences with him about 9 years ago:

    What he’s missing, I think, is that the law has to accomplish a jubilee, not economics wonkery, and also that it’s very important to get at the root of the problem by repudiating the government’s ipse dixit in monetary matters:

    https://strikelawyer.wordpress.com/2011/12/23/nature-of-money-steve-keen-chartalism-and-lawyers/#comment-1837

  61. Daniel H says:
    @Jus' Sayin'...

    It’s foundations were laid by the insane policies of central banks, the criminal and immoral greed of the 1% (and their 5% and 10% lackeys),

    Yes. It’s the 5% and 10% who are as much the problem. We know where their allegiance lies.

  62. Yes. Let the proles off the hook. They will rebuild and we can rob them again. No. The ruling class is not thinking about tomorrow. They are making their get away behind a smoke screen.

  63. Craken says:

    A jubilee merely redistributes money from productive to unproductive people. There is already too much of such redistribution in America.

    Better ideas:

    $$$ Cut the legs out from the great American university scam in a multi-front war on pseudo-education and the robbery-through-status-scam. Start by stopping federal and state subsidies for non-scientific fields. That means no federal or federal-backed loans except to hard science and engineering students. Re-institute IQ tests for prospective employees: these are vastly cheaper than proving intelligence by paying for a degree. Discourage people, by financial and rhetorical means, from studying soft subjects and taking worthless soft degrees.

    $$$ Stop importing millions of immigrants to drive down wages for Americans. Make no mistake: that wage arbitrage is the primary reason for post-1965 immigration policy.

    $$$ Break up the giant banks. So long as they are giants they have no accountability, they’re just corrupt crony-capitalist quasi-governmental entities.

    $$$ Impose high taxes on short-term international financial flows into America to discourage harmful speculative activity.

    $$$ Hit the parasitic portion of the wealthy through higher capital gains and estate taxes, and aggressive tracing of tax haven criminality. Also: impose high taxes on luxury goods and luxury real estate.

    $$$ Force public companies to take votes from all employees to determine what executive pay ought to be, with a very wide range of options available for voting (to include no pay).

    That’s a start, off the top of my head.

    But, you know what the real problem is?
    The Treason of the Elites. And neither my ideas nor Hudson’s jubilee do anything to fix that. There is only one way. History lights the path.

  64. @Franz

    What the boomer-haters conveniently confuse is that all boomers are from a certain generation, but not all of that generation are boomers. They refuse to acknowledge that it’s a set of attitudes, ideology, and lifestyle. But, hey, inter-generational warfare is so easy, demands no thinking, and (I presume) is so much fun to do. Meanwhile, the (((real enemies))) are rofl.

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