We have tens of millions who cannot repay their debts. But they are all trying to. That sucks huge amounts of money out of the economy. And that means these people cannot function properly as consumers or workers. That's the reason people aren't coming into your restaurant. It's the reason people aren't taking your yoga class. It's the reason they haven't hired you to redo the kitchen.
And so tens or hundreds of millions of perfectly responsible business owners and employees are also suffering from this slump. That's the reason we have a shortage of demand. That's the reason no one is hiring.
Even worse: People who are underwater on their mortgage, but who do not want to default, cannot move to where the jobs are either. They are stuck with their home.
You want to break this logjam? Try Chapter 11 for the nation. Massive defaults. Clear the decks, clean the books.
Monday, September 12, 2011
Marketwatch's Bret Arends calls for national Jubilee
Bret Arends is the latest to publicly call for national Jubilee. He sells the idea as a parallel to bankruptcy, and highlights the way in which excessive debt prevents economic activity, thus actually harming the economy and making us all poorer.
His article is also very good for directly answering many of the objections to debt-cancellation. He does not, however, present a practical plan for debt cancellation, just the need to do it.
As far as I know, I am still the only one who, following an analysis of the debt-based problem, has put forth a realistic and simple plan for accomplishing it. Please help spread the word. The need for Jubilee is reaching a public-awareness critical mass. We need to transition the public mind onto the ease of doing it.
The Jubilee Solution is simplicity itself:
1) The federal government issues electronic checks to pay off all debt.
2) The banking reserve ratio is raised by a proportional amount to soak up the liquidity (trapping the extra money in the banking system).
Viola! All debts cancelled, the economy reset for takeoff.
Debt cancellation, without violation of contract, without inflation.
IT CAN BE DONE!!!!
Here is his description of how the debt overhang prevents economic activity:
Posted by Justin at Monday, September 12, 2011