Last night saw the launch of , one of the most extraordinary responses to the financial crisis that I’ve seen so far.
As you may be aware, our debt problem in the Western world is not limited to government. Our companies are in debt too, and so are individuals. In the US, 1 in 7 people is being pursued by debt collection agencies. These agencies buy up debt cheaply from people who have failed to keep up with payments, and then chase it up themselves. And that begs a question or two. If you can sell debt cheap, why do ordinary people have to pay it back at full value? And what happens if someone else buys it and doesn’t claim it?
That’s how Rolling Jubilee plans to intervene. They’re raising money through donations and fundraisers, buying up tranches of cheap debt, and then writing it off: “We buy debt for pennies on the dollar, but instead of collecting it, we abolish it” they explain. “Think of it as a bailout of the 99% by the 99%.”
Because the secondary debt market sells big tranches of anonymized debt, the project won’t be able to help specific people. It will be abolishing debts at random. And you might be surprised how much debt you can get for your money. Yesterday the organisation had received just over $198,000, and that would buy $3.8 million in debts to annul.
Rolling Jubilee is a project from , an offshoot from Occupy Wall Street. Some of their rhetoric on debt is a little overblown, and they will have to tread carefully in the debt market, where they will not be welcome. But the idea itself is innovative, radical and generous.
It’s a non-profit organisation, and all donations will go towards buying and abolishing debt. .