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Kilkenny writes: "Strike Debt, a movement formed by a coalition of Occupy Wall Street groups looking to build a popular resistance to debt, plans to hold a telethon and variety show November 15 in support of the Rolling Jubilee, a system to buy debt for pennies on the dollar, and abolish it."

Strike Debt protesters gathered at the GlobalNoise protest in Midtown Manhattan on October 13. (photo: Occupy Wall Street)
Strike Debt protesters gathered at the GlobalNoise protest in Midtown Manhattan on October 13. (photo: Occupy Wall Street)


Occupy Wall Street Activists Buy Up Debt to Abolish It

By Allison Kilkenny, The Indypendent

14 November 12

 

trike Debt, a movement formed by a coalition of Occupy Wall Street groups looking to build a popular resistance to debt, plans to hold a telethon and variety show November 15 in support of the Rolling Jubilee, a system to buy debt for pennies on the dollar, and abolish it.

The telethon, which has already sold out, will feature artists including Jeff Mangum of Neutral Milk Hotel, Lee Renaldo of Sonic Youth, Guy Picciotto of Fugazi, Tunde Adebimpe of TV on the Radio, plus other surprise guests.

Strike Debt hopes to raise $50,000, which the group claims can then be used to purchase, and eliminate, around $1 million in debt.

The group has already performed a test run on the debt market by spending $500 on distressed debt, buying $14,000 worth of outstanding loans and pardoning the debtors.

Business Insider called the test run "impressive" and "noble," although Alex Hern at the New Statesman points out that, while the law is on Occupy's side, the banks may not be. Hern points to Felix Salmon's discussion of the American Homeowner Preservation, which sought to buy up distressed mortgages and find ways for the homeowners to stay in their homes and pay off their debt.

Salmon:

The idea might have been elegant, but it didn't work in practice, because the banks wouldn't play ball: they (and Freddie Mac) simply hated the idea of a homeowner being able to stay in their house after a short sale, and often asked for an affidavit from the buyer saying that the former owner would certainly be kicked out.

David Rees, one of the organizers behind the project, writes on his blog: "This is a simple, powerful way to help folks in need - to free them from heavy debt loads so they can focus on being productive, happy and healthy.

Now, after many consultations with attorneys, the IRS, and our moles in the debt-brokerage world, we are ready to take the Rolling Jubilee program live and nationwide.

"As we've seen on the East Coast in the aftermath of Hurricane Sandy, we, the people, are the ones who are best equipped to provide the help that damaged communities need," Strike Debt stated in a press release.

"For years, all kinds of communities have been facing down a debt crisis that has stretched their resources and made them especially vulnerable to sudden shocks. 76 percent of American households are in debt, and 15 percent are being pursued by a debt collector. People shouldn't have to go into debt for basic necessities like groceries, healthcare and education. Though the banks got bailed out, the people are still waiting for their turn."

The wonkier subgroups of Occupy Wall Street such as Strike Debt and Occupy the SEC are interesting because these resistance fronts are familiar enough with the jargon and inner workings of the financial system to fight for reform from the inside out. In the case of Occupy the SEC, activists petitioned financial regulators to help ensure that Dodd-Frank reforms are implemented in a way to keep pressure on the big banks, whereas Strike Debt hopes to turn the opaque debt market into an advantage for the 99 percent.

At Waging Nonviolence, Yates McKee writes:

The occupations last fall were a crack in the system, unleashing the political imagination. Strike Debt aims to deepen that crack, calling for us to imagine actively refusing compliance with the power of creditors over our lives. Significantly, the launch of the Rolling Jubilee falls on the one-year anniversary of the eviction of Zuccotti Park; while the work of Strike Debt has taken a very different form than physical occupation, since its start last summer it has channeled and refined the principles of direct action, mutual aid and dual power that were at the heart of the original camp.

Throughout this period Strike Debt has woven together days of action in the conventional sense - mass assemblies, marches and physical interventions at sites of financial injustice - with a wider diversity of tactics. Two major dates in this regard have been the September 17 OWS Anniversary Convergence and the October 13 Global Day of Action Against Debt and Austerity. In both cases, Strike Debt kept its eyes on the prize of long-term movement-building by supplementing the negative call to "Strike Debt" with the affirmative principle of "reclaiming the commons."

Occupy activists have lately been in the business of transforming philosophical debates about class inequality and government corruption into real, tangible solutions. This month alone, activists have been praised for their work in the aftermath of Hurricane Sandy in which it was often Occupy activists - not the Red Cross, US military, or FEMA - helping to dispense aid to devastated communities. Now, it is Occupy activists who plan to buy up debt and help some individuals who have long suffered under the crushing weight of debt.

 

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+15 # DaveM 2012-11-14 21:04
If the banks insist on an affidavit demanding that owners of foreclosed homes be kicked out even if their debt has been purchased, fine. File the paperwork to "kick them out", then sell the house back to them for a dollar. Or allow them to stay as "tenants" with the "rent" being payment of the utility bills.

This could work. I would assume that banks are eager to get anything at all for debt they will never collect, and a great deal of currently unsettled material which includes criminal activity by banks can be sorted out at far less cost than the price of attorneys.

At it appears at this point, the criminals are going to walk free. We ought to at least do what we can to deprive them of their victims.
 
 
+3 # tomr 2012-11-14 22:13
This is great and I'm behind it all the way. But I have one question...

If Strike Debt, or whoever, starts buying up debt, won't the price on that type of paper rise? I'm thinking it would work according to classic microeconomics rules - an increase in demand will drive the price up.

I don't think this issue is a deal-breaker, but it should be taken into account in the calculations. Anyone have any thoughts on this?
 
 
+3 # Replicounts 2012-11-15 14:52
Not too likely, because of the scale.

Even when you can buy debt for 5 cents on the dollar, a billion dollars of debt still costs $50 million. It just might be possible to find people who would contribute that, but still it would be a small fraction of the total debt problem.

Here is a way this action might be scaled to any size:

If an activist organization could debt at 5 cents on the dollar, then it could offer it to the debtor at 6 cents, abolishing the debt if the offer is acted on. Give the debtor (or government agency, nonprofit, crowd-sourced funding, or anyone) a year, say, to buy and abolish all or part of that debt. Then sell the rest back to the market at about 5 cents. Use the extra penny on the dollar of abolished debt to support and extend this action.

Last I heard there were many unemployed "financial engineers." Maybe a few of them would volunteer or accept a stipend to put this together.
 
 
-1 # karenvista 2012-11-14 23:10
I'm sure they are correct that you can buy distressed debt (financial debt like credit card, auto loans and other unsecured debt for $.20 on the dollar or less.)

The question is, why would you want to do this?

The unemployed people won't be given their car or credit rating back. That's gone and nothing we can do will make the financial giants give it back even if they are given 20 cents on the dollar.

Except in very rare cases, foreclosed homes will be sold for more than these folks are talking about so the banks won't turn them over. Even if they were to try to save a few houses, it could only be very few and would require very competent real estate attorneys to be sure that it actually was effective.

Also, the Salmon comment shows that the mortgage companies wouldn't cooperate to allow the homeowners to stay in their houses.

After a debt is not paid for several months it is sold at a disount to a collection agency and written off and the company takes a tax deduction for the loss. At this point your credit is hit. If it happens several times your credit is ruined. This is the point at which Strike Debt is proposing to buy debt at a deep discount.

Why would we want to give more money to banks and collection agencies with no benefit to the debtors?

I don't think they've thought this through very well.
 
 
+8 # NanFan 2012-11-15 08:55
karenvista, you are not wrong about not getting back credit ratings, but what is really good about this is that it stops the vicious circle of people not being able to pay back the bogusly trumped up loans to corrupt bankers AND it allows people to be freed up, as was said above, to buy necessities and improve the economy, be productive, healthy, and happier.

The Worldview is wrong until we all realize and start ACTIONS that reveal that credit ratings are bogus and the bankers are so corrupt they'll do anything to ruin the people by taking ANY money they can.

People are more important than profit! Thank you Strike Debt for acting with conviction, knowledge and a solid good conscience.

N.
 
 
+1 # 4yourinformation 2012-11-15 10:08
OK...so what's YOUR solution?
 
 
+1 # dkonstruction 2012-11-15 12:52
Quoting 4yourinformation:
OK...so what's YOUR solution?


There were/are different solutions to the different debt problems. for example, when it comes to the foreclosure crisis one solution proposed from the very beginning was for the federal gov't to purchase all of the delinquent mortgages and turn the owners into renters. Give them a specified period (let's say 5 years) to get back on their feet again while in the meantime they pay rent and a portion of this is put aside to build up a new downpayment pot so that when the 5 years is up (it could be less if they get back on their feet sooner) they are given the "right of first refusal" to repurchase the home and become owners again. This would have cost the federal gov't far less than it did when it bailed out the banks; would have kept the vast majority in their homes and thus helped maintain the property values of neighbors as well as the overall conditions in communities as a whole.

Second piece of this should have been to take Fannie and Freddie private again. when they were both truly private gov't sponsored entities they only gave out plain, vanilla, 30 year fixed rate mortgages and their portfolios were fine (and they had fewer defaults than the banks)...proble m was when they "went public" and thus became subject to "shareholder value" and "profit maximization" and the major purchaser of bundled mortgages on the secondary market.
 
 
+4 # dkonstruction 2012-11-15 10:29
karenvista,

respectfully, the point here is not about whether this will help people with their credit rating.

when someone's debt is sold the new "owners" continue to come after you and you owe it to them even if the original creditor has written off their losses. the point here is to get rid of the debt.

this creative strategy does 3 things:

1) works to eliminate rather than "restructure" debt

2) focuses attention on how debt has become a weapon of social control and by extension the evils of the whole lending at interest system

3) starts organizing around people's immediate needs (to paraphrase the black panthers) which is how successful movements are built

4) builds an alternative institution (in this case an organization that purchases debt as a way to provide people with real debt relief through debt foregiveness.

and, lastly, when combined with other proposals coming out of Occupy (though they are not alone in calling for these) such as the mounting calls for publicly owned financial institutions (banks) that function like public utilities it is part of a broader agenda that if realized would bring about fundamental structural/syst emic reform of our financial system that would be much more comprehensive and genuinely progressive financial reforms than anything we have seen coming from either party.
 
 
+8 # Wyntergreen 2012-11-15 02:16
Good on you, Occupy!
 
 
-1 # MylesJ 2012-11-15 10:11
Start a company called Home Protectors. Buy up the debt, evict the tenant. Have the former tenant start a company under their own name like Tom Smith Home Protectors. Pay Home Protectors 1 or 2% of ownership a month for providing live in security to your new house. Have it set up that if/when the tenant makes enough money to pay their way again, you sell them the house for the remaining principal. You would have to rent out enough homes to pay the taxes and do maintenance on the other homes until the former owners could take them over again.
 

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