debt relief
In the movie and book, Fight Club, the main objective of the anti-hero, Tyler Durden, is to bomb the biggest finance buildings in an apparent bid to destroy the debt record – putting an end to a crucial aspect of the divide between the rich and, well, everybody else. Naturally, this is absurd notion because such records are backed up on computer systems globally. While I will not link to it, several people have proposed actions of collective computer hacking that could potentially wipe the debt record.
Given all the news in recent weeks about the looming recession and the millions of Americans struggling with debt and foreclosures (are we all aware of how bad things are right now?), I got to thinking about wiping out the debt records. If a national referendum were held on legislation to relieve all Americans of their debts, an incredible majority of people (mortgage-holders, credit card holders) would likely favor it, while a very powerful minority of business leaders and stockholders would oppose the idea with the vehemence of French Revolutionaries*. Of course, most banks would fail as would many businesses depending on those banks (apparently, many retailers are surviving only by taking on debt). In fact, the whole idea has economic disaster written all over it. Things might get much, much worse before they got better. But in the economy that resulted, banks would offer far less credit and people might be more reluctant to take on debt. Who knows? It’s too radical to reasonably picture.
On the other hand, as a democracy, we should ideally be responding to wishes of the majority and acting in the interests of the people, rather than the business community (I know I’m rehashing Domhoff, Mills, Chomsky, and others here). It’s undeniable at this point that our society needs a substantial financial re-organization to survive. What’s it going to be? Short of radically increasing wages, forgiving debts might be the only way to create a sustainable financial future for the majority of Americans. While I’m in no way advocating Tyler Durden scenarios, we really need a Manhattan Project for our collective financial future.
*According to Bill Domhoff, “In terms of types of financial wealth, the top one percent of households have 44.1% of all privately held stock, 58.0% of financial securities, and 57.3% of business equity. The top 10% have 85% to 90% of stock, bonds, trust funds, and business equity, and over 75% of non-home real estate.”
