A debt jubilee is the only way to avoid a
depression.
By Michael Hudson
March 22, 2020 "Information
Clearing House" -
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.
