I believe that Jubilee could be accomplished without the complaints of theft or inflation that typically arise. Here is how it would work:
The government would issue checks to everyone to pay off their debts.
While doing so, the government would raise bank reserve requirements by the corresponding amount.
Thus, a huge new pool of money would come into existence to pay off people's debts, but then it would get sunk in the banks, never to recirculate to cause inflation.
No contracts would be violated, no cases could be dragged to court, no extra laws would have to be passed.
Viola! Rejoice in the Jubilee Year!
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9 comments:
Two and a half years and not one person has pointed out the pile of flaws in this idea?
Let me start with these.
1. Moral hazard argument. Paying off people's debts encourages them to take on even more debt. They never get to learn the lesson they need to learn.
2. Favoritism argument. It benefits only those who made bad decisions.
3. Justice argument. They banks are paid back with money they aren't allowed to spend. What would you think if your employer gave you a paycheck but said you couldn't spend it?
4. Corruption argument. If there is a pool of money sitting around a politician will find a way to spash around in it.
5. Currency devaluation argument. Printing money out of thin air reduces the value of the money, even if you think you have it locked up. For reason 4 above the world must consider it to be in circulation.
You will notice there are actually two whole posts devoted to "answering objections". I encourage you to review those pages, in addition to the short responses below:
1. Applies even more to the creditor institutions that lent out the debt.
2. It bails everyone out, including the creditors, and thus, does not play favorites.
3. Justice is on a balanced scale, i.e. great justice for many outweighs minor injustice for some.
4. Gov't can create infinite money at any time, this is a problem for politics not policy.
5. So what? Currency is just a tool, a means to social good, not an end.
Thank you for the feedback.
I've just found this after seeing Steve Keen on a BBC TV programme.
One question for you Justin - what about the people who have no or manageable debts, who've lived withing their means ?
Good questin, anon. For one, on the macro-economic level, they will benefit from a better economy (higher wages, greater profits, etc), as when all the debt is paid off, the Debt-Deflation Depression will be instantly ended. [As a practical political matter, perhaps they could be offered a stimulus check as part of the Jubilee process.]
Justin with all due respect your answer on this point is incredibly weak and shows a lack of thinking through "...perhaps they could be offered a stimulus cheque..."
It's clear your "solution" benefits those who've behaved irresponsibly by taking on too much debt, which by the way was their own choice, at the expense of those who've behaved responsibly. I'm afraid it's complete and utter nonsense.
Anon, Steve Keen proposed this very solution today, including stimulus check!
If Jubilee is to work, it has to part of an overall policy shift with regard to the whole economic system. ALL Debts, public and private s/b part of the Jubilee. The only exception should be those debts that are sequestered deposits (rental security deposits, accrued wages, etc.). Furthermore, government itself needs to be cut back to its essential function, the protection of the INDIVIDUAL rights of its citizens--and NOTHING else. This will restrain the ballooning of governmental mission creep, while keeping intrusions into our privacy at a minimum.
Good point, Anon. It is easy to see, the bigger problem is definitely runaway government expansion.
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