These Guys Want to Buy Up Your Debt and Set You Free | Mother Jones
Jared Sperli stashed this in economics
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.)
seems to me this could be a useful business model (hmmmm....) to be a hidden broker for people who want to clear out their debt or credit report w/o excess hassle....
Where's the business though? How do you get paid to do it?
Probably some sort of cost-plus fee. The difficulty is you have to buy debt in lots, no one will sell a particular person's debt.
Could someone become a bank, borrow money at 0% from The Fed, buy up all the debt, and profit?
except you have to get approved by the Fed to be a subscriber bank (i.e. access to the Fed directly)
Why are banks allowed to do this to people?
"Spending $500 to cancel $14,000 in debt is an amazing bang for the buck—or, seen differently, an amazing illustration of how the financial system that we all bailed out now enslaves many of us. Even if the Rolling Jubilee becomes wildly successful, it probably won't cancel out more than a tiny fraction of our trillions worth of personal debts. Its value is as a devastating political statement: Debt is cheap, except when it's owned by the banks."
And when can we start canceling credit card debt?
I think it's a good idea. 2000 was a year of Jubilee where the Pope suggested that countries cancel all debt and start anew. The only issue with personal jubilee is that you probably only want to forgive the debts that let people get a new start and not the ones that will fall straight back into it. I hope it succeeds, it sounds like a different take on Kiva.
Definitely a variation on that theme.
I hope they succeed, too.