HomeLatest ThreadsGreatest ThreadsForums & GroupsMy SubscriptionsMy Posts
DU Home » Latest Threads » Forums & Groups » Main » General Discussion (Forum) » Michael Hudson: A debt ju...

Sun Mar 22, 2020, 07:33 AM

Michael Hudson: A debt jubilee is the only way to avoid a depression

https://www.washingtonpost.com/opinions/2020/03/21/debt-jubilee-is-only-way-avoid-depression/

By Michael Hudson
Michael Hudson, author of “… and forgive them their debts” and “Killing the Host,” is president of the Institute for the Study of Long-Term Economic Trends and is distinguished research professor of economics at the University of Missouri at Kansas City.

March 21, 2020 at 5:18 p.m. EDT

Even before the novel coronavirus appeared, many American families were falling behind on student loans, auto loans, credit cards and other payments. America’s debt overhead was pricing its labor and industry out of world markets. A debt crisis was inevitable eventually, but covid-19 has made it immediate.

Massive social distancing, with its accompanying job losses, stock dives and huge bailouts to corporations, raises the threat of a depression. But it doesn’t have to be this way. History offers us another alternative in such situations: a debt jubilee. This slate-cleaning, balance-restoring step recognizes the fundamental truth that when debts grow too large to be paid without reducing debtors to poverty, the way to hold society together and restore balance is simply to cancel the bad debts.

The word “Jubilee” comes from the Hebrew word for “trumpet” — yobel. In Mosaic Law, it was blown every 50 years to signal the Year of the Lord, in which personal debts were to be canceled. The alternative, the prophet Isaiah warned, was for smallholders to forfeit their lands to creditors: “Woe to you who add house to house and join field to field till no space is left and you live alone in the land.” When Jesus delivered his first sermon, the Gospel of Luke describes him as unrolling the scroll of Isaiah and announcing that he had come to proclaim the Year of the Lord, the Jubilee Year.

Until recently, historians doubted that a debt jubilee would have been possible in practice, or that such proclamations could have been enforced. But Assyriologists have found that from the beginning of recorded history in the Near East, it was normal for new rulers to proclaim a debt amnesty upon taking the throne. Instead of blowing a trumpet, the ruler “raised the sacred torch” to signal the amnesty.

It is now understood that these rulers were not being utopian or idealistic in forgiving debts. The alternative would have been for debtors to fall into bondage. Kingdoms would have lost their labor force, since so many would be working off debts to their creditors. Many debtors would have run away (much as Greeks emigrated en masse after their recent debt crisis), and communities would have been prone to attack from without.

</snip>


Excellent article.

9 replies, 1100 views

Reply to this thread

Back to top Alert abuse

Always highlight: 10 newest replies | Replies posted after I mark a forum
Replies to this discussion thread
Arrow 9 replies Author Time Post
Reply Michael Hudson: A debt jubilee is the only way to avoid a depression (Original post)
Dennis Donovan Mar 22 OP
Sherman A1 Mar 22 #1
Igel Mar 22 #4
denem Mar 22 #5
Sherman A1 Mar 22 #8
denem Mar 22 #9
PJMcK Mar 22 #2
denem Mar 22 #6
safeinOhio Mar 22 #3
Laelth Mar 22 #7

Response to Dennis Donovan (Original post)

Sun Mar 22, 2020, 07:37 AM

1. Believe it when I see it

I hope that this is the case, but I have serious doubts it will occur.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to Sherman A1 (Reply #1)

Sun Mar 22, 2020, 08:29 AM

4. Same old, same old.

Everybody seems to be saying, "I've wanted this down for years, because there's no other way and we're doomed unless you do what I say. Now that we have this plague, there's no other way and we're doomed unless you do what I say."

Wasn't true before, probably not true now, but people are more panicked and there's more uncertainty.

Most decisions made under stress and in panic are wrong. It's like thinking, "What can I do? I know, I'll be 24 72-megaroll-packs of toilet paper!"

Reply to this post

Back to top Alert abuse Link here Permalink


Response to Sherman A1 (Reply #1)

Sun Mar 22, 2020, 08:33 AM

5. Sherman A1 - its doable.

The Fed adds some zeros to banks and creditors balances to compensate them for the cancelled debt. Black helicopter money.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to denem (Reply #5)

Sun Mar 22, 2020, 03:49 PM

8. Sure it's doable and it should happen

I will believe it when I see it.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to Sherman A1 (Reply #8)

Sun Mar 22, 2020, 03:51 PM

9. When that fleet of black helicopters appears on the horizon

its on.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to Dennis Donovan (Original post)

Sun Mar 22, 2020, 08:07 AM

2. Bankers in America will never allow this

Look at their history! They create dangerous bubbles of debt and when the bubble bursts, they cry poverty and demand the government bail them out. Taxpayers and debtors get screwed twice and the bankers end up whole.

Some system we've had.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to PJMcK (Reply #2)

Sun Mar 22, 2020, 08:36 AM

6. The Fed adds some zeros to their asset balances. Home and hosed.

A one off - never, 'never ever' to be repeated.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to Dennis Donovan (Original post)

Sun Mar 22, 2020, 08:11 AM

3. This being a "Christian Nation" I demand one.

My guess is that there are no Christian banks.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to Dennis Donovan (Original post)

Sun Mar 22, 2020, 10:39 AM

7. Yes. A jubilee is precisely what we need. n/t

-Laelth

Reply to this post

Back to top Alert abuse Link here Permalink

Reply to this thread