The debt collection industry is one of the least liked in the United States. They purchase debt for pennies on the dollar, then proceed to harass, threaten, and abuse people who may or may not actually owe the debt. They place levies, harass at work, and use any tactic possible to skirt the law. The same firm will transfer the debt to another entity, owned by them, in order to bypass “do not contact” letters, will send notices to incorrect addresses intentionally, and call wrong numbers, regularly, all to force people who they call “low life” and “scum” to pay up. And if you do pay, it may not end it either, as the debt notice is sold to yet another entity, which then begins the process again, believing the debt unpaid. The same debt will wind up in a limbo-land, without legal recourse, a nightmare for some to deal with. Even worse if the debt was not the person being harassed to begin with. Studies have found that up to 79% of credit reports contain errors, ranging from duplicate entries (each with their own debt collector handling) to entries belonging to someone else entirely.
Now the Occupy movement has decided on using this very system against the people who abuse it. The program, called Rolling Jubilee, plans to purchase blocks of consumer debt, for pennies on the dollar just as the debt collectors do, and instead of collect it, write it off. Forgiving the debt, wiping the slate clean as it were. Here is a video by the group explaining the program:
Due to the bulk-sale nature of this debt, the program cannot target specific people, or debt, but it has the theoretical ability to make a huge difference to a large number of people. A similar tactic has been used by the Occupy our Homes movement as well to much success.
Part of the first steps of this program is a telethon to be held on Thursday, November 15th. It will be starring Janeane Garofalo, Lizz Winstead, Max Silvestri, Hari Kondabolu, David Rees, The Yes Men, John Cameron Mitchell, Jeff Mangum of Neutral Milk Hotel, Lee Ranaldo of Sonic Youth, Guy Picciotto of Fugazi, Tunde Adebimpe of TV on the Radio, Climbing Poetree, and many more. Tickets have already sold out, but the event will be live streamed starting at 8pm eastern.
This avenue is a way to legally address the looming issue of consumer debt. The origin of the problem of consumer debt can be traced to the steps Alan Greenspan proposed in the 1980s to solve the wage gap problem generated by Reaganomics. Under him, household debt grew rapidly, along with usury-levels of interest, artificially masking the dropping income levels of the middle class.
The steps taken in Iceland after they addressed their financial crisis stand as a blueprint for the Occupy movement. By the forgiveness of consumer debt, Iceland has had its economy grow at 2.5% in the first quarter of this year, after the measures were enacted. The elimination of consumer debt has enabled their nation to expand consumption, driving the growth in their economies. The restricting of debt comes along with increased wages, improving the standard of living simultaneously. By the right-wing pundits view of the world, Iceland should have collapsed with these steps. Instead, it is growing at a brisk pace.
This step by the Occupy movement will go a long way to freeing up constrained consumer spending, and give our economy a huge boost.