When I wrote about this Monday, everyone had questions. Some answers, from Ariel Kaminer, in today’s NYTimes:
… The group is holding a fund-raiser on Thursday at the Greenwich Village nightclub Le Poisson Rouge, and says it has already raised $129,000 through online donations — enough to buy $2.5 million worth of defaulted loans, thanks to their steep markdowns. The people who incurred the debt in the first place will get a certified letter informing them they are off the hook.
The fund-raising effort has its own name, Rolling Jubilee, a reference to the biblical tradition of a jubilee year, in which all debts are forgiven and all indentured servants are given their freedom. Its more recent origin is the Occupy encampment in Zuccotti Park, where a group of protesters started talking seriously about the problem of burdensome student debt. That conversation eventually broadened to a consideration of the role of debt in American society, and Strike Debt was born.
Since then, some of the group’s projects have been rebellious, like producing the “Debt Resistors’ Operations Manual,” an explanation of the credit industry and how to outmaneuver it, including advice on how to fight, or even ignore, creditors. Rolling Jubilee, by contrast, works within the financial markets…
Since then, the Rolling Jubilee has even won praise from Forbes, the business magazine, which said it was “Finally, an Occupy Wall Street Idea We Can All Get Behind.”…
The group’s first purchase will be medical debt, but it hopes to move on to tuition debt and credit card debt. Members acknowledge that the most wildly successful fund-raiser will not come anywhere near the amount that American consumers owe, estimated at more than $11 trillion.
“This is a long-term thing,” said Christopher Casuccio, who graduated with about $100,000 in student debt. “We all know it’s going to take years to transform the economic system.”
My emphases. The Forbes article answers another question. There’s a specific IRS exemption for “gifts”: “The company [you owe] cannot lower your debt burden without dumping you with a large tax bill. But A.N. Random Individual can indeed lower your debt burden without that tax being due. You or I, OWS, can purchase the debt and then write it off and that’s a gift: no tax is payable upon that debt reduction.”
Hard to imagine a less debatable debt remission than saving people from the ‘bad personal choice’ to get expensively ill under our current insane “World’s Best Healthcare, If You Can Afford It” system. As we’ve all been trying to explain to economic absolutists resisting the Affordable Care Act, the number of individuals who are going to go out and get expensively ill just to ‘freeload’ is so vanishingly small that the question of moral hazard really doesn’t exist here.