Addressing Objections to Jubilee

Thank you for your comments, I have tried to address them individually.

"You are advocating theft on a stunning scale."

Jubilee is the opposite of theft. Jubilee is returning assets to their rightful owners. Bankers don't create wealth, in fact, they are just parasites on the productive economy. Our economy is overrun with parasites right now, and we need to shake them off.

"What level of "moral hazard" would arise from government mandated cancellation of whole classes of debt? "

Jubilee actually has a very low "moral hazard", as it prevents the same problem from happening again because credit would be tight after a Jubilee. Jubilee also dramatically decreases the moral hazard inherent in banking, since the threat of Jubilee keeps the money-lenders in check, preventing them from recklessly gambling with other people's money for their own profit, creating bubbles and crashes the way they have recently (and throughout history when under-regulated).

"The closest parallel would be Russia after the Soviet victory when the workers' paradise revoked all indebtedness. Immediately the was nation plunged into penury."

America's wealth is not based on debt, it is based on capital, skills, knowledge, and initiative. If we cancelled all debt tomorrow, heck, if we got rid of all money, we would still be as wealthy as the day before.

"I would venture that you have much more debt that you do "paper" (your scornful term) assets."

Paper is not an asset, it is just a claim on someone else's productive work. In our current crises, all paper assets are being shown for what they really are: paper. However, it is causing a collapse of the real economic system, which can be avoided.

"So you are probably arguing for your own benefit."

True, but it is also to everyone's benefit. Well, except the parasitic bankers, who have amassed personal fortunes leading our economic system to ruin.

"You are also conflating the grifters in the fixed income units of Wall Street firms with the buyers of the "debt" instruments they created. How different from the scamsters are you? "

Jubilee is not a scam. In fact, it is the end of the debt scam.

"The managers of a Landsbank in Germany who bought mortgage backed securities rated by Standard and Poors as AAA should not be penalized for making what they have reason to believe in foresight was a sound investment. Nor should the CFO of a manufacturing company who bought commercial paper as working capital to be liquidated over the coming year as needed for operating costs."

I agree, no one should be punished for making what they thought was a sound investment. Our banker-created bubble has made victims out of everyone, a Jubilee would just punish the right party - the banks - not the innocent.

"You make it sound as if the credit markets are an expendable luxury. I managed accounts payable for a small warehouse business; believe me I know that credit is essential for any business, small or large."

Operating costs mainly have to be paid for out of cash reserves and cash flow. If a company is a going concern with a valid business model, they wil be able to get credit even after a Jubilee, but a Jubilee will force us to switch back to the savings model rather than the debt model of economic growth.

"The debt cancellation must also accompany the confiscation of contracted collateral."

No, a Jubilee involves no confiscation.

"FDIC is not meant to guard against a complete bailout of every single saving account holder to 250K. This is what a Jubilee would guarentee -- that the FDIC will have to pony up for each savings account, since the bank assert are basically junk in a Jubilee."

Instead of throwing trillions at banks, we would be throwing trillions at individual citizens. That is right, and correct.

"There'll be no money available anywhere (you just jubilee'd it away!) Yeah, there's plenty of "free and clear" assets sitting around, but nobody have money to lend to anyone else as credit."

Money, even though it is fiat paper, would not disappear. We would still be able to conduct trade with currency. Banks would also be able to lend out what they had in savings, just as they do now.

"If you cancel or default on every debt, then you become untrustworthy. By definition, future interest rate will be either confiscatory (would you want to lend to someone who drops his debt?); or hard to come by."

No one's individual credit-worthyness would be impacted, as Jubilee is a general amnesty. The American federal government would be uncreditworthy, but that would be a good thing, forcing our federal government to keep balanced and backward-looking budgets.

"Your Jubilee is a "Fairy tale" scenario where people in the story say "oh, too bad. It's ok. I forgive you" and happily goes on to continue lending / giving money at the same rate to the little bad boy who borrows and splurge on random things."

Debt forgiveness is no fairy tale, it happens all the time. Nor do I assume lending would occur on the same basis as before. A Jubilee would forcible shift the economy from a debt to a savings basis, and thereby make it more sustaibable and rational.

"It also assumes that the act of Jubilee itself doesn't destroy the source of the money itself. "

Debt is not money, debt is not wealth. We would still have the same money and wealth after the Jubilee, just not burdened with unpayable debt.