It does dig younger people out of crushing debt, yes. That's the point: they can start a life without exponentially increasing debt grinding them to dust. This lets them participate in the wealth of the nation and incentivizes them to work and build families, thus producing more real wealth, rather than checking out and making just enough to pay the interest and monthly subscriptions.
There is no way out of this that doesn't involve helping young people throw off the yoke of crushing usury. A modern debt jubilee is the fairest way to do that: it rewards savers to an extent with free and clear money while paying off the debt of debtors.
The catch is that debtors must use the payment to extinguish their debt. Non-debtors get the money free and clear.
This is as fair a mechanic as I have ever heard for a debt jubilee. Steve Keen is a genius.
The important part is that the borrower is now out from under exponential debt and can get on with their lives, and total debt in the economy is brought down to a sustainable level. Non-debtors get something too: free and clear cash.
Is it perfect? No, of course not. Nothing this simple could be perfectly fair. But it is simple, hard to game, addresses the core problem (too much debt) and is probably as fair as it will get, practically.
Certainly the elites would scream bloody murder if someone important legitimately proposed it. Keen has been ignored and mocked for years. That's evidence enough for me.
And is basically equivalent to “why don’t we just print more money and give it everyone?”.
And anyway a terrible idea.. why do you want to penalize people who have low interest rate mortgages for instance? Anything they’d gain would be offset by inflation…
I'd hope they'd also make exceptions for any loans under the current rate of inflation, but good luck getting that passed. Having to immediately pay off a 0% loan (if anyone still offers those) clearly is far from the optimal use of the money.
Beyond that, a modern debt jubilee isn't about you optimizing your individual financial situation.
Rather, it is about:
- keeping it as simple and hard to game as possible
- reducing total debt in the economy to a sustainable level
If you have to pay down or pay off your mortgage, sorry. On the other hand, you would own a house free and clear. So life wouldn't be all bad.
You can't get away from wealth disparity by giving to everyone, eventually you have to take from some group to give to the other. The group being taken from will generally not like that.
If all of a sudden there is a huge amount of extra cash in teh system, then prices go up alot. Lets say everything goes up 20%.
Now the poor who had debt no longer have debt but the price of life has gone way up for them.
The rich just pocket the money and the inflation doesn't affect their day to day life very much. Infact they are better off as assets have now inflated due to this new money.
Thinking about this more, this like the poorer you are the worse off you'd now be in this situation.
Unless the solution is to close your eyes and pretend like inflation would never happen, which the last year has shown us is not a reasonable belief to hold.
But the net result was (AFAIK) a significant drop in indebtedness and poverty.
But then again, the inflation was picked up by companies as an excuse to profiteer, and initiate a spiral, which is why we find the Fed today kicking the economy in the groin.
Also not practically possible at least in the real world. Which is possibly why it sounds so great…
Even if debtors pay off a chunk of their debt, companies will be lining up to offer them new debt, especially as the chance of default goes down with the new precedent.
The way a real debt jubilee has to work is that debt is repudiated, with the creditor left holding the bag - not made good on.
Doesn't this fuck over savers who have their money parked in fixed income securities, while giving a huge boon to anyone owning equity in indebted companies? On a comparative basis, it also hugely benefits people in their late twenties/thirties who were able to take out massive loans (ie. mortgage) while not doing much for everyone else.