Tuesday, February 3, 2009

Jubilee Would Not Destroy the Economy

Fundamentally, debt is currently destroying our economy. Specifically, speculative debt. Jubilee would excise the cancer of debt from our economy.

Jubilee would not destroy the money supply. Jubilee means that all moneys currently on deposit, would stay there. Money, even in the form of a credit deposit, would not be destroyed. Jubilee just means that you would not have to pay it back.

Your house, free and clear.
Your car, you own with no need for another payment.
The stuff you bought with your credit card, yours with no need for repayment.
The line of credit given to you stays in your account.

But doesn't that wipe out the banks? No, obviously not. Your savings account is still sitting there, in trust with your bank. Same with your IRA, your 401K, and your pension. In our modern Jubilee, they will all be backed, secured by the government.

That is the part that people have the hardest part understanding. They just don't get that in our paper money system, the only guarantee of the money is the government itself.

Jubilee just means freedom! All assets in the whole country, owned free and clear. That simple. Business can continue on, just as before.

Some minds immediately wonder: "But what about all the money people owe me? My business can't continue unless I get that money!" But upon deeper consideration, that is simply not true.

All business is immediately given a start-over pass, with NO OUTSTANDING LIABILITIES! Business will have to be conducted on a sustainable basis: out of savings and cash flow. If your business generates cash flow, it will survive. If you need a loan, as a money-making venture, banks will give it to you. But it will be done out of real wealth based on accumulated savings, not false wealth based on speculative debt. Your business will also have a nice cushion, as its rent and other credit payments just dropped to zero.

Jubilee means a reset of the economic system: generate cash flow and you will be just fine.

There is only one class of economic activity that will be wiped out by a Jubilee: that of the economic parasite. Specifically bankers and landlords. Many of them will have to find something actually productive to do, rather than live off the sweat and toil of others. Both would exist after a Jubilee, no doubt to eventually increase their power again, but Jubilee would hit them hard, and rightly so.


Anonymous said...

I would agree that mortgages should be wiped out, but that would not seem to apply to rent. Otherwise you are redistrubuting wealth and where would that end. Why not redistrubute all business to the rest of us too. I own my house but I owe the bank money. It is easy to see the rule of debt removal in action. If I owned rental property then any mortgages on that should be wiped out which is also easy to see. What would not be as easy is why tennants would not have to continue to pay their current rent. It is not a debt but an obligation for the use of the unit. Just like any other utility.

If you eliminate the landlord then how do you cleanly resolve ownership. I would think this would be a mess. What about a hotel owner do his renters end up owning a room? This would also lead to no rentals in the future which is obviously not desired.

Anonymous said...

A year of Jubillee would not exclude people from paying 'rent'. Jubillee targets debt created by the lending activity...not common things like paying rent on a month to month basis. Jubillee puts an end to long-term lending and challenges us with a pay-as-you-go society...rather than the credit-based society that we now have which noone seems to be able to manage properly.

Anonymous said...

Fantastic idea. Let's all lever up to buy rental property.