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November 12, 2012

Rolling Jubilee
Posted by Patrick at 07:25 PM * 105 comments

Like a lot of people, I find myself impressed by the basic idea of the Rolling Jubilee (linked by Abi from her sidebar a few days ago). Taking advantage of the fact that one really can buy up the “distressed debt” of unfortunate individuals for pennies on the dollar, this Occupy-affiliated group is raising funds to do so—and then forgiving the debt. As they point out, functional societies throughout human history have had some kind of “jubilee”—a moment in which the system gets reset. I mean, it’s in the Bible for cry eye.

Writing on his “Moneybox” blog on Slate, Matthew Yglesias says “it’s a pretty great idea” but then goes on to quibble:

The question you have to ask yourself here is “why is this a better idea than just giving money to poor people”? And I think it’s hard to answer the question. Given two struggling families, one of which is indebted and one of which isn’t, it’s not clear why you’d think that the family that’s borrowed heavily in the past is more worthy of assistance.
What I think Yglesias doesn’t understand is that this isn’t just an attempt to render charity to the needy; it’s an attempt to undermine a specific kind of power relationship. As understood and practiced today, debt is a kind of servitude. If you have to take on unsustainable debts—or if you have the misfortune to live in a country that took on unsustainable debts—you’re just supposed to quietly accept that your life is permanently fucked, and that your creditors get to dictate its terms. The odd thing, though, is that people regularly figure out that this is monstrous.
ATHENS — As the head of Greece’s largest oncology department, Dr. Kostas Syrigos thought he had seen everything. But nothing prepared him for Elena, an unemployed woman whose breast cancer had been diagnosed a year before she came to him.

By that time, her cancer had grown to the size of an orange and broken through the skin, leaving a wound that she was draining with paper napkins. “When we saw her we were speechless,” said Dr. Syrigos, the chief of oncology at Sotiria General Hospital in central Athens. “Everyone was crying. Things like that are described in textbooks, but you never see them because until now, anybody who got sick in this country could always get help.”

If you believe that the idea that “debts must be paid” is more important than the above, you’re monstrous. I don’t know for sure that Rolling Jubilee will ultimately do a lot of good in the world. I don’t know what gotchas lie in wait. But I know what moves them. It’s more than charity, it’s justice. It moves me too.
Comments on Rolling Jubilee:
#1 ::: Jamie ::: (view all by) ::: November 12, 2012, 07:53 PM:

Might I just say, fuckin' aye.

I like Matt's analysis a lot of the time. And I get his take, and how it differs from mine. That is all perfectly fine. I wish he had a less narrow mode though which to look sometimes.

Every few years I hear objections and/or attacks on the existence of libraries. And lots of folks who try to interpret the moment explain that maybe thy aren't bad ideas.

#2 ::: Stefan Jones ::: (view all by) ::: November 12, 2012, 07:55 PM:

For many people in today's America, the definition of "justice" has come to mean making sure they don't get away with it.

Damn the suffering, damn the wider consequences, damn the fact that the rules were insane to begin with . . . "if they didn't want ___ they shouldn't have ___ in the first place."

#3 ::: Holden Pattern ::: (view all by) ::: November 12, 2012, 08:16 PM:
What I think Yglesias doesn’t understand is that this isn’t just an attempt to render charity to the needy; it’s an attempt to undermine a specific kind of power relationship.

Honestly, Yglesias has never understood anything like that. He's an advocate for fine-tuning status quo power relationships and sometimes blunting the effect of status quo power relationships, not undermining or overturning them.

#4 ::: Cadbury Moose ::: (view all by) ::: November 12, 2012, 08:29 PM:

...and as (probably in full agreement with) the Greek oncologist:

"WHISKY TANGO FOXTROT INTERROGATIVE OVER".

From the sidebar:

“The whole point of society is to be less unforgiving than nature.” (Arthur D. Hlavaty)

I am currently coping with a relative who has been given 7 - 14 _days_ life expectancy. This is very much not good, but thank $Deity for Aneurin Bevan and the NHS.

#5 ::: Yatima ::: (view all by) ::: November 12, 2012, 08:32 PM:

I abolished $500 of distressed debt today. AND I LIKED IT.

#6 ::: Laura Gillian ::: (view all by) ::: November 12, 2012, 08:45 PM:

Cadbury Moose, I'm very sorry to hear about your relative. I offer my condolences and send good thoughts for you and them as you cope with a very hard situation.

My basic philosophy is that we're all people stuck together on this rock of ours. If we can't be kind to each other while we're here, what's the point? I'm going to check the ol' bank balance to see if I can contribute. This seems like a Good Thing.

#7 ::: Lila ::: (view all by) ::: November 12, 2012, 08:52 PM:

Cadbury Moose, my sympathies.

#8 ::: josiah ::: (view all by) ::: November 12, 2012, 08:55 PM:

It doesn't go for 'pennies on the dollar' until the original creditor and three or four institutions after that gives up on collecting the debt. A 'pennies on the dollar' collector can usually be thwarted by simply requesting that the collector show who they are and that they really own the debt, all in writing within 5 days according to Federal Law.

Yes, this might really help at the margins but overall it seems like a minor idea. If somebody has the money and the time to do this, they should by all means do it. Often times these are long inactive debts, beyond the statute of limitations in most states, where people are often tricked into making payments, reactivating a debt.

#9 ::: Cadbury Moose ::: (view all by) ::: November 12, 2012, 09:04 PM:

Laura & Lila (at 6 & 7 - but not at 6's and 7's I hope):

Many thanks, I'm coping so far.

#10 ::: Avram ::: (view all by) ::: November 12, 2012, 09:06 PM:

This reminds me of one of the things that aggravates me about discussions of the US national debt, and Social Security.

About 17% of the national debt is held by the Social Security Trust Fund, because since the 1980s, payroll taxes (which fund Social Security and Medicare) have been kept higher than they need to be, and income taxes (which fund the general government) have been kept lower than they need to be. In other words, the class of people whose primary tax liabilities are income taxes (rich people and corporations) have been under-taxed, while those whose primary tax liabilities are payroll taxes (the poor and working classes) have been over-taxed to make up the difference.

Putting it more simply still, the rich have been borrowing money from the non-rich for thirty years. By the usual rules of debt, this ought to mean that the non-rich get to dictate terms to the rich, and yet somehow this hasn't been happening, I suppose because conversation around the debt is usually framed in terms of poor welfare moochers leeching off rich job-creators.

And if you're thinking to yourself that the effort to privatize Social Security look like attempts by the rich debtor class to cancel their debt — yup.

#11 ::: Cadbury Moose has been gnomed ::: (view all by) ::: November 12, 2012, 09:07 PM:

Not quite sure why, but there's some Maya Gold for their Lownesses.

#12 ::: Cadbury Moose ::: (view all by) ::: November 12, 2012, 09:10 PM:

Avram at #9

This reminds me of the old ASR tagline:

When the revolution comes we're going to need a longer wall.

#13 ::: Lee ::: (view all by) ::: November 12, 2012, 10:02 PM:

josiah, #8: That's what I was about to say. Much of what this is about is abolishing a corrupt and illegitimate debt-collection industry that functions out of the same boiler rooms as every other scam industry. They buy up a list of "debtors", harass them by telephone for 3-6 months* in the hopes of squeezing some money out of that turnip, then fold up and resell their only asset -- that list. If Rolling Jubilee does nothing but retire the pool of lists of long-dead debt being shuffled around, it's still doing some significant good, in that those fly-by-nights will be forced to find a different kind of scam to run.


* And yes, you can get that company to stop calling you by the method Josiah mentions, or by several others. But (1) this requires that you know what to say, and (2) it only works until the company folds up and sells the list again, because they don't actually take your name and number OFF the list.

#14 ::: Avram ::: (view all by) ::: November 12, 2012, 10:06 PM:

So if Jubilation Lee and Chuck Taine had a kid...

#15 ::: Tehanu ::: (view all by) ::: November 12, 2012, 10:57 PM:

Given two struggling families, one of which is indebted and one of which isn’t, it’s not clear why you’d think that the family that’s borrowed heavily in the past is more worthy of assistance.

Um ... this smells funny. Who are these families that aren't indebted and why are they so much more moral than the families that are? This is Victorian morality talking -- "we only give charity to the deserving poor." I was just reading the other day on slacktivist (I think), talking about Jesus, that he didn't say "Feed the poor, but only after you've checked to make sure they're the right kind of poor." And anyway, Patrick's point is right too: this isn't so much about "helping" individual families as it is about opposing the whole rotten structure.

#16 ::: Stefan Jones ::: (view all by) ::: November 12, 2012, 11:11 PM:

Avram: Yes, absolutely.

And when the "borrowing from the trust fund on the cheap so we don't have to raise taxes on the wealthy" vultures come home to roost, the wealthy shake their fingers in outrage and scream "Entitlements! Redistribution! Takers! It's their fault!"

* * *
Describing the real and complete picture of wealth concentration and the imbalanced tax structure requires things like graphs, and history lessons. It is really hard for someone using those to compete with an angry, glib turd like Rush Limbaugh.

#17 ::: Dave Bell ::: (view all by) ::: November 13, 2012, 01:49 AM:

This has echoes of August 1914 and what the German Army routinely did in the areas they occupied. In Chapter 17 of The Guns of August, Barbara Tuchmann recounts the frightfulness in Belgium, shows that it was policy of the German Army, who seemed to build on an assumption that any guerilla warfare was plotted by governments. Even in rural areas, where a great many people still have guns, it was alleged that the French and Belgian governments were smuggling firearms to the francs-tireurs.

The Wikipedia article on Schrecklichkeit, after reading Tuchman, seems to gloss over the apparent preparations for this. Hostage-taking happened from the first day of the war, and the posters were pre-printed.

The Germanic view seems to be that the lumpen proletariat cannot spontaneously do anything. And even the likely blue-on-blue that triggered the destruction of Leuvain was not Germany's fault.

Are Bankers following in the footsteps of the Huns and Nazis of the last century? "It isn't our fault, you made us do it."

#18 ::: Harry Payne ::: (view all by) ::: November 13, 2012, 02:17 AM:

This initiative got into the Guardian a day or two back. Look in the Comments section if you want to find it, but avoid the comments page if you want to keep your sanity. I thought I'd clicked over to the Daily Mail by mistake, what with the whinging on the lines of "I worked hard all my life and now these lazy irresponsible people who took out credit they shouldn't have will be able to buy Lamborghinis yada yada yada..."

I'm just content that OWS may be onto something from the level of bile being spewed out against them. Someone, somewhere, must be standing in a heap of smashed crystal statues and porcelain vases screaming, "Who the hell do they think they are? It's MY inalienable right to buy up the undeserving poor's debt. I'M the rich one! And they CAN'T write it off! It's not FAIR!"...

#19 ::: etv13 ::: (view all by) ::: November 13, 2012, 03:45 AM:

Tehanu@15: To be fair to Yglesias, there are people who are too poor, or undocumented, or whatever, to have ever gotten any significant amount of credit, even back in the day when it was all too easy for working and middle class people to get overextended. Those people do need our help, and deserve our consideration, too.

#20 ::: KristianB ::: (view all by) ::: November 13, 2012, 05:33 AM:

I love the idea of the jubilee, but I absolutely expect the banks to immediately rewrite the rules purely to ensure continued suffering to the people so immoral and undeserving as to have been trapped under the bank's foot.
Some people just never forgive their victims.

#21 ::: Naomi Parkhurst ::: (view all by) ::: November 13, 2012, 07:23 AM:

It doesn't seem like this is meant to be a cure-all for everyone's financial woes. It's a simple and creative way to help some people and protest some injustice. Doesn't mean you can't go help other people and protest other injustice while you're at it.

#22 ::: paul ::: (view all by) ::: November 13, 2012, 10:03 AM:

What Tehanu said. Especially considering that so much of the past 20 years has involved pro-debt propaganda specifically touting debt as a form of investment. Get in on the housing boom by taking out a mortgage. Get out of a low-wage job by taking out educational loans. Borrow on your credit cards to start a new business. And so forth.

There is one thing that will be interesting to watch, however. The secondary market is very volatile, and sensitive to the possibility of profit. So if someone starts buying up debt, the price of the remaining stock may rise. (Back in the 80s and 90s when people did debt-for-nature swaps with various tropical countries, each block purchase raised the secondary-market price of the remaining debt enough that the de facto (as opposed to face) value of the debt outstanding remained the same. Albeit the countries' cash flow improved.)

I have mixed feelings about this project. But since I'm not dictator of the world, I see no reason to harsh on something good because it's not perfect.

Oh, and another thing. Yglesias should know this: by helping one family get out from under crushing debt, you help the families all around them as well, because you free up cash flow and energy. People live in communities. (To deny this requires also denying that a bunch of foreclosed houses can hurt a whole neighborhood.)

#23 ::: Gerald Fnord ::: (view all by) ::: November 13, 2012, 10:10 AM:

My heart goes out to you, Cadbury Moose.

Social Security: if workers' wages and salaries had risen with their increased productivity, would we even have any problem funding Social Security? It's almost as if those gains had been siphoned off into another universe, presumably one of the ones from which Mr Romney and The Help got their election predictions. ("We're going to explore Richworld---bring _lots_ of tasps. ")

And yes, the problem is hardness of heart, too many see anyone else's misfortune as fit and just punishment for 'something they did'---this is made much easier go bear because they think themselves to be immune to such an eventuality, being fundamentally different from the ones being 'punished'. (Thanks, Sts Calvin, Spencer, and Rand.)

And in that environment, it's inevitable that some people will claim that a world in which debts are forgiven and tumours get treated is one in which there are _no_ breast cancer treatments at all, that absent the punitive and the punished there is no progress. (I bring this up because noöne here is likely to entertain this secularised Abominable Fancy, but there are places where it is assumed true.)

My heart goes out to you, Cadbury Moose.

#24 ::: Jon ::: (view all by) ::: November 13, 2012, 10:53 AM:

While my heart leapt at the idea of Rolling Jubilee, some later examination made me question it; qui bono?

The banks don't care; they've already sold the debt.

The debtors don't care; they'll never know that they've been helped. (And, as someone who, 7 years after getting a phone number, STILL gets debt-collections calls for the previous phone number holder, I do have some small skin in this...)

Future borrowers don't care; there's no statistical chance of actually being helped by this in the future, so no moral hazard.

The people who and buy the lists--they care, because now they're getting their investment back.

Which just incentivizes them to buy more debt, harass more people, and eventually sell the list on to someone else... because I'm reasonably sure (from a cynical outsider's perspective) that the companies aren't taking a loss on this.

So it looks to me like the awesomely-intentioned action, if it takes off and has substantial impact, could lead not just to higher prices for debt resale, but to increased speculation in debt purchase and resale.

Which is NOT, one would assume, the intended outcome...

#25 ::: Eric K ::: (view all by) ::: November 13, 2012, 11:06 AM:

There's more to human dignity than whether or not you're broke.

I recently saw a documentary about a third-world gold mine. This was an informal co-operative mine, run by a small village. The mining process was dirty and dangerous, but the miners appeared amazingly happy, almost to the point of self-delusion. Everybody dreamed of the future and they celebrated every $100 gold strike with wild shouts of joy.

These miners weren't happy because they were good capitalists. They were happy because they controlled their own destiny.

Now let's consider the people helped by the rolling jubilee. Materially, they're probably better off than those gold miners (no explosives! no rock dust! no liquid mercury!). But they're trapped in debt, and they're living in fear of the next phone call. And they know—right down in their bones—that everybody thinks it's their own damn fault.

Yglesias is concerned that somebody might waste money on the less "worthy." But that's the entire point, isn't it? To rescue one soul from an intolerable burden of guilt and blame, and to give them back their lives as free, sovereign citizens?

As Graeber pointed out, debt without adequate bankruptcy provisions can become a particularly insidious form of slavery, because it's supposedly the victim's fault. Of course, we always forget that the lender had a choice, too, and often showed an truly irresponsible lack of judgement by offering adjustable interest rate loans on overpriced housing.

(To be fair to Yglesias, he does conclude, If the peculiarity of the distressed debt situation and the concept of a jubilee happens to inspire people and motivate them to be more generous with their time and money than would otherwise be the case, this is a perfectly good idea. But I still think he's missing the point.)

#26 ::: D. Potter ::: (view all by) ::: November 13, 2012, 11:46 AM:

Harry Payne @18: You know, that's the Prodigal Son's brother's lament: "How come he gets the fatted calf and the party when I've always been a good guy?"

Some things never change.

Cadbury Moose, sympathy on your relative and strength for you.

#27 ::: Nancy Lebovitz ::: (view all by) ::: November 13, 2012, 12:50 PM:

The companies that try to collect distressed debt are so slipshod and unethical, I wonder how of the debt that's bought will stay bought.

#28 ::: John A Arkansawyer ::: (view all by) ::: November 13, 2012, 01:00 PM:

I don't think this is a fix, but it's a brilliant media hack.

#29 ::: Keith Edwards ::: (view all by) ::: November 13, 2012, 01:14 PM:

Just read on Twitter that the Jubilee has already raised $100,000 in donations, enough to buy 2 million dollars of debt.

#30 ::: etv13 ::: (view all by) ::: November 13, 2012, 02:03 PM:

Erick K @ 25: Actually, Yglesias is not concerned that the money might go to someone "less worthy." In the very next sentence after the ones Patrick quotes, he says, "And similarly, for any particular indebted family it's not obvious that on a dollar-per-dollar basis debt forgiveness is more helpful than just handing over some cash." This is consistent with Yglesias's general approach to in-kind benefits and the like; he thinks we would generally do better just to hand over chunks of cash and let people use their own judgment about how to spend it.

#31 ::: Dave Bell ::: (view all by) ::: November 13, 2012, 02:16 PM:

If you were to give the person in debt cash, it would have to match the face value of the debt to be able to clear the debt. You would be encouraging the purchase of discounted debt to make a large profit.

Buying the discounted debt is a more cost effective to eliminating the debt, even if it pushes up the price that would be paid.

It does depend on an honest records system, which allows the cancellation of the debt to be proved. Which makes you wonder about why banks are alarmingly casual about the documentation of these instruments as they are turned into new kinds of financial gambling.

#32 ::: paul ::: (view all by) ::: November 13, 2012, 02:28 PM:

Dave Bell @31:

Take a look at MERS. The banks quite deliberately gave up the ability to prove title in a clear and definitive way to avoid local-government fees in the low tens of dollars per transaction. By doing so they not only caused oodles of losses and additional administrative expenses but also deprived municipalities of billions of dollars in revenue that could have been used for keeping up services.

#33 ::: Sandy B. ::: (view all by) ::: November 13, 2012, 04:16 PM:

jon@24: "The debtors don't care; they'll never know that they've been helped. (And, as someone who, 7 years after getting a phone number, STILL gets debt-collections calls for the previous phone number holder, I do have some small skin in this...)"

There is a plan, although it took some digging to find out where I'd seen it.( http://occupyoakland.org/2012/11/debt-resistance-the-peoples-bailout-aka-the-rolling-jubilee/ )
"After we have purchased and successfully abolished this $1,000,000 worth of debt, those whose debt was abolished will be notified with a letter that explains:

(1) That their debt has been abolished, and how that was done
(2) How to contact credit agencies to make sure the debt cancellation is reflected in their credit score
(3) How they can pay some of the jubilee forward, to abolish others also in debt. This is the “rolling” aspect of the jubilee."

#34 ::: Alexx Kay ::: (view all by) ::: November 13, 2012, 04:55 PM:

"more worthy of assistance"... That rings a strong bell. Where have I heard that before?

Oh, right, in a work of unexpected philosophical depth, the computer game Ultima VII from 1992. There, it was phrased as the philosophical principle "Worthiness Precedes Reward". That is, if you're a good person, good things will happen as your reward. Of course, if you play far enough into the game, you realize that this is part of an entire philosophy designed to sound good on the surface, but actually destroy society. Looked at another way, this principle says "If you have *not* been Rewarded, it must be because you are *not* Worthy -- so we don't have to worry about you." Or taken to a further extreme, "If you are being 'rewarded' with oppression, theft, and murder, *that* must be what you are deserving of." I've been leery of the term "worthy" ever since.

#35 ::: Jon ::: (view all by) ::: November 13, 2012, 05:18 PM:

sandy @33, thanks!

#36 ::: OtterB ::: (view all by) ::: November 13, 2012, 05:34 PM:

Alexx Kay @34, it reminded me of Eliza Doolittle's father in My Fair Lady. "I'm one of the undeserving poor, I am." Nor does he wish to be anything else. Which is all very well for a humorous character but not as a political philosophy.

The concept of being worthy or unworthy of help also reminds me of Miles Vorkosigan saying that his mother believes that if you choose an act, you choose the consequences. And therefore if you want a consequences you must choose the acts that will lead to it. I agree with that philosophy. It becomes inhumane only when it's inverted to "You have these consequences, therefore you must have chosen them." (and, implicitly, it's Not My Problem). Because, of course, taking the actions improves the odds of getting the outcome you want, but life is messy and there are no guarantees. Some things are out of your control. Some things are not obviously mistakes until you look back on them later. Sometimes the deck is stacked against you. Sometimes that's deliberate.

I love the idea of the Rolling Jubilee, BTW. Talk about putting your money where your mouth is.

#37 ::: dcb ::: (view all by) ::: November 13, 2012, 05:37 PM:

Cadbury Moose @4: Sympathies for you and your relative.

I like the "rolling jubilee" idea. taking that kind of both financial and mental/emotional burden off people has to be a good thing.

#38 ::: charming quark ::: (view all by) ::: November 13, 2012, 06:00 PM:

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store

#39 ::: Kevin Riggle ::: (view all by) ::: November 13, 2012, 06:15 PM:

OP: The question you have to ask yourself here is “why is this a better idea than just giving money to poor people”?

I can't quite fathom what kind of blindness would lead Mr. Yglesias to ask this question.

If someone is in debt for $14,000, and you have a choice between paying it off for the full $14,000 face value or purchasing it for $500 and forgiving it, isn't it a better use of funds to do the latter? Isn't it a better return on investment, which these days is a metric by which we judge even charities?

(What it really means is that some quant somewhere has calculated based on actuarial tables that the expected return on this $14,000 of debt is $500, and the debt-collection agency should really be offering the debtor the opportunity to pay the expected value in return for the forgiveness of the debt. It's only that the debt-collection industry would rather continue to squeeze blood from these particular stones indefinitely in the hopes of outperforming their actuarial tables that they don't adopt this approach themselves.)

#40 ::: Bruce Cohen (Speaker To Managers) ::: (view all by) ::: November 13, 2012, 06:50 PM:

When I first heard about the Rolling Jubilee I was really excited, for several reasons:

1. It's an attempt to help out the people must burdened by the financial malfeasance of the financial MOTUs, those who not only lost their wealth, but were also stuck with the bill for the meltdown, and not bailed out.

2. It's a big FU to the system, and way to attach your name to the greeting card. That gives me great joy.

3. It's a concrete way for those of us who are still afloat financially to tell others who are having trouble that we are on their side, that society does care about them and wants them to survive. Even those whose debt won't be retired will know that our society is more than just a mechanism for enriching the goniffs at the top.

4. It's an indication that the people of the US is beginning to learn the lesson that the peripheral Eurozone countries are learning about who's shafting them and what to do about it. In Spain, for instance, there have been hundreds of demonstrations to block foreclosure of people's homes, and yesterday the Spanish government suspended home evictions for 2 years.

So I've retired $2,000 of debt, and I feel good. I certainly hope that it helps those in need, and hurts those who caused this mess, if only by making it yet clearer how much they're despised.

#41 ::: Zline ::: (view all by) ::: November 13, 2012, 08:20 PM:

I don't think really large debts go for 'pennies on the dollar'. These are very Small debts. The large debts such as Student Loans, Mortgages, Credit Cards are protected somehow by the system. It's just not that easy. For any person who needs this help, chances are they have small AND large debts that need relieved.

#42 ::: Jeremy Leader ::: (view all by) ::: November 13, 2012, 09:01 PM:

Welcome to Making Light, Zline. I'd greet you with the traditional (to ML) "do you write poetry?", but I don't, so I'd feel a little foolish asking you, and this thread hasn't seemed to inspire prosody so far.

I don't have any idea the size of the individual debts that RJ is buying, but they claim so far to have retired $2.75 million (at a cost of about $140 thousand, or almost exactly 5 cents on the dollar).

Where do you get your information about the size of the debts that RJ is buying? Do you have alternative suggestions for how to help these people?

#43 ::: Nancy C. Mittens ::: (view all by) ::: November 13, 2012, 09:25 PM:

Even if they're not the biggest debts a person or family has, they're still part of the weight holding them down. Even lifting part of the load is better than adding to the burden.

#44 ::: lorax ::: (view all by) ::: November 13, 2012, 10:28 PM:

Zline, I knew that federally-backed student loans are "protected" (IIRC, even bankruptcy cannot discharge them), but I hadn't heard that about the other forms. Can you provide more information? What about medical debt, which is one of the largest sources for many people?

#45 ::: Laura Gillian ::: (view all by) ::: November 13, 2012, 10:45 PM:

Nancy Mittens 43, exactly. It strikes me as very much an "it matters to this starfish" solution to a systemic problem. I don't think it's The Solution, but every little bit helps.

Jon 24, the Occupy movement has been flexible and creative so far, and I'm willing to bet they're more agile than the debt collection industry. By the time the debt collectors shift their practices or raise debt prices, Occupy can move on to a different approach. In the meantime, they'll have cleared some amount of bad debt. (And flipped off the collectors, neener neener!)

#46 ::: Nicole J. LeBoeuf-Little ::: (view all by) ::: November 14, 2012, 12:52 AM:

So RJ address student debt specifically in the FAQ:

Can Rolling Jubilee abolish student debt?

Student debt has surpassed $1 trillion partly because it is one of the most protected forms of debt by federal law. Student debtors may not discharge their loans in bankruptcy and lenders have rights to garnish wages and social security payments. The vast majority of student loans have these federal guarantees. We cannot buy these loans because there is no secondary market. However, we believe it may be possible to buy private student loans that are not guaranteed by the federal government; Strike Debt may attempt to purchase this kind of debt after doing further research.

Mortgages and credit card debt are not similarly mentioned as "protected" or otherwise out of reach of the RJ strategy in the FAQ.

#47 ::: Tom Whitmore ::: (view all by) ::: November 14, 2012, 01:02 AM:

I can tell you that credit card debt is not protected in those ways, Zline @41; or at least it wasn't 10 years ago. I speak from personal experience. I didn't get the debt reduced to "pennies on the dollar", but did get it cut in half by negotiating with the company that bought it. And I've lived without a credit card of my own ever since: debit cards are a different animal.

It makes a very big difference not to live with a lot of debt. Again, personal experience. YMMV.

#48 ::: etv13 ::: (view all by) ::: November 14, 2012, 03:38 AM:

Dave Bell @31, Kevin Riggle @ 39: The point is, if you give the indebted person money, she doesn't have to use it to retire the debt. She can use it to keep the lights on, or put food on the table. By giving her cash, you are respecting her agency and her judgment about which of her needs are most urgent. After all, if people are calling her to harass her about payment, she can always turn the phone off. In theory they can garnish her wages, but it seems unlikely they 'll actually do so, or have all the paperwork sufficiently in order to do so. And I don't quite see what prevents her from negotiating the same debt-retirement deal the jubilee people are negotiating. If it's ignorance and lack of negotiating savvy, maybe the best thing to do would be to help her with that directly, rather than paternalistically deciding to just relieve her of debt without considering her own priorities.

As to the emotional burden, I'm not sure that getting a letter saying you've received this charity and asking you to pay it forward is a lot less emotionally burdensome than owing the original debt. For some people maybe it is; for others, maybe it's more burdensome.

Finally, in terms of bang for the buck in the greater economy, it might well be better to give people money that they are going to spend on groceries and clothes and even toys for their kids, rather than simply retiring debt at a steep discount in the secondary market.

Originally, I was with Yglesias in thinking, "great idea, if not quite as good as just giving money to people who need it." But the more I think about it, the less of a great idea it seems to be.

Re mortgage debt: in most states, there is an anti-deficiency statute which prevents the mortgagee from coming after you for whatever you still owe after they take the house. Most of the debt the jubilee people are paying off is most likely credit card debt, or payday loan debt.

#49 ::: etv13has been gnomed ::: (view all by) ::: November 14, 2012, 03:43 AM:

No idea why; I lack the internet savvy to include links and the like. I'm drinking some nice California sparkling wine, which I am willing to share.

#50 ::: Dave Bell ::: (view all by) ::: November 14, 2012, 03:50 AM:

No poetry in this thread?

A banker in Wall Street bought debt,
And the right paperwork did forget.
With no valid proof
That he owned house and roof,
The judge ruled that he still won the bet.

#51 ::: Paul A. ::: (view all by) ::: November 14, 2012, 04:32 AM:

etv13 @ #48: And I don't quite see what prevents her from negotiating the same debt-retirement deal the jubilee people are negotiating.

From the Rolling Jubilee FAQ: "There is no way to seek out a specific person and buy that person's defaulted debt... Anonymous accounts are bundled together and sold as a whole."

This is not a problem for Rolling Jubilee, because the plan calls for doing the same by whatever debt comes their way. To buy out a specific debt you would have to keep buying bundles until chance brought you the bundle with your debt in; this doesn't strike me as a practicable plan for an individual who already has money troubles.

#52 ::: Paul A. ::: (view all by) ::: November 14, 2012, 04:37 AM:

Further to my previous:

Rolling Jubilee are not, as I understand it, "negotiating a deal", they're tapping into an existing debt market on the established terms.

That such a market exists, and that the established terms are set up to favour the money-grubbers and not the people laboring under the debts: to shine light on these things is part of the point of the exercise.

#53 ::: etv13 ::: (view all by) ::: November 14, 2012, 05:16 AM:

Paul A @ 51, 52: Well, but the "money-grubbers," as you put it, can't go after the indebted person in a bundle, they have to go after her individually, and at that point, as Tom Whitmore's experience illustrates (and mine, too), she has an opportunity to cut a deal with them on an individual basis. It's because the jubilee people are outsiders to the original transaction(s) that they have to buy debt on the secondary/tertiary market in bundles.

But . . . between the time I wrote my last comment and the time it posted, it occurred to me that the jubilee people don't really have a realistic option of just giving people cash, and to the extent that they don't, I ought to back off my criticism that giving people debt relief isn't as good as giving them cash. Realistically, it's what can be done on a private-charity basis, and it's much better than doing nothing. To the extent we're talking about what we ought to do on a public, legislative basis, however, I think Yglesias is right that we ought to favor cash transfers over more narrowly conceived programs that give in-kind benefits.

#54 ::: Neil W ::: (view all by) ::: November 14, 2012, 06:10 AM:

etv13 @48 And I don't quite see what prevents her from negotiating the same debt-retirement deal the jubilee people are negotiating. If it's ignorance and lack of negotiating savvy, maybe the best thing to do would be to help her with that directly, rather than paternalistically deciding to just relieve her of debt without considering her own priorities.

In general if you try to negotiate a 95% or 80% write down of a debt, then the bank will, understandably, not agree. Then when they look at several dozen such debts they've been unable to collect on, and so have got no money* from, to get them off their books at a 80-95% discount seems reasonable. Rolling Jubilee draws attention to this perfectly reasonable craziness.

Here's an example of how your idea works if you happen to have millionaire pals.

* And lost money on administration etc.

#55 ::: Neil W has been gnomed ::: (view all by) ::: November 14, 2012, 06:11 AM:

I have cherry cake made to my Nan's recipe. Also coffee.

#56 ::: inge ::: (view all by) ::: November 14, 2012, 07:38 AM:

Given two struggling families, one of which is indebted and one of which isn't, it's not clear why you’d think that the family that's borrowed heavily in the past is more worthy of assistance.

This kind of implied argument makes my hackles rise. I could think of half a million reasons for one poor family having debt while another hasn't, which all boil down to "their luck ran out", but in the end, all that matters is that the indebted family is in deeper caca, because they get poorer every month.

Getting a person out of crushing debt is freeing them. Yes, one could do that by handing them enough money to pay their debt. But, at pennies to the dollar, limited resources go a lot further and that way, one hopes, the moral hazard for the lender is reduced.

#57 ::: lorax ::: (view all by) ::: November 14, 2012, 08:36 AM:

A question that occurred to me this morning: How chopped-up and repackaged are the debts that are bought and sold on this sort of market? If someone buys up and retires $1000 worth of debt, is that all one person's debt, or is it $10 each of 100 people's, or anywhere in between? I ask because it seems like completely erasing one person's debt would make a much larger difference than slightly reducing 100 people's.

#58 ::: Sandy B. ::: (view all by) ::: November 14, 2012, 08:59 AM:

lorax @57: I would be surprised if debts this small [relative to a $14 million house or Trump's first bankruptcy, of $65 million] were chopped up into pieces. Then again, I've been surprised before.

etv@48: I'm a little late to the discussion, but we're not talking about "$100 of debt retirement or $100 of groceries." We're talking about $2000 of debt retirement or $100 of groceries. And as mentioned, if you give the individual $100 and they choose to retire debt, they're not going to do as well (even in the millionare case) as Occupy can do buying debt in the secondary market.

Jeremy@42: "I don't have any idea the size of the individual debts that RJ is buying, but they claim so far to have retired $2.75 million (at a cost of about $140 thousand, or almost exactly 5 cents on the dollar)." From looking at the webpage closely, I think they have already raised the money and are waiting till 11/15 to deploy it. They did a $14000 for $500 test run.

#59 ::: Lori Coulson ::: (view all by) ::: November 14, 2012, 10:09 AM:

Good on them -- and for those debating the merits of the action:

It is better to light one candle than to sit and curse the darkness.

After I see what tax time does to me this year -- it's going to be weird because of money involved with my retirement -- I may be able to help.

#60 ::: fidelio ::: (view all by) ::: November 14, 2012, 10:21 AM:

More on Rolling Jubilee in the New York Times. From the article (I got the link via Balloon Juice), it appears that their first target is medical debt. As Annie Laurie at BJ notes, it's hard to argue with relieving people of the burdens resulting from the poor personal choice they've made to become expensively ill or injured in the US. Forbes is now covering this as well.

#61 ::: Jim Macdonald ::: (view all by) ::: November 14, 2012, 11:39 AM:
“When we saw her we were speechless,” said Dr. Syrigos, the chief of oncology at Sotiria General Hospital in central Athens. “Everyone was crying. Things like that are described in textbooks, but you never see them because until now, anybody who got sick in this country could always get help.”

If Dr. Syrigos wants to see that sort of stuff outside of textbooks he needs to come to the USA. I've seen that sort of thing ... and worse ... among the working poor; the folks who have three jobs each, none of those jobs with medical benefits, who, if they take a day off to visit the doctor, know that they're going to lose at a minimum one day's pay if not lose the job entirely.

#62 ::: Lee ::: (view all by) ::: November 14, 2012, 01:55 PM:

etv13, #48: And I don't quite see what prevents her from negotiating the same debt-retirement deal the jubilee people are negotiating.

I can answer that one. The debt-collection companies will not negotiate that level of deal with a debtor, only with a broker. Even the type of deal Tom Whitmore got is relatively rare, and requires that you be dealing with an established, legitimate company, which most debt brokers are not.

Also, there's a "gotcha" in the law to the effect that once you enter into a "business relationship" with certain types of companies, ALL your old debt -- even that which has aged out beyond the statute of limitations on collection -- is reactivated and the clock starts again on collecting it. CapitalOne used to be (and may still be, for all I know) notorious for this -- they'd offer people what looked like a good deal on a credit card with one hand, and then set the duns on them with the other once they accepted. I don't know whether the debt-collection companies are allowed to do that or not, but it sure as hell wouldn't surprise me if they were -- and if that's true, the last thing any individual should do is enter into negotiations with them.

#63 ::: glinda ::: (view all by) ::: November 14, 2012, 07:53 PM:

Cadbury, I am so sorry. It sucks.

(Monday evening, my best friend was told that she has cancer, it's metastatized, inoperable, no radiation or chemo indicated. Don't have a timeline yet, am getting medical power of attorney so I can deal with doctors with/for her. It sucks.)

(If you want to talk, email, whatever, let me know, am here and understand. also understand if you don't want to.)

#64 ::: Jinnayah ::: (view all by) ::: November 14, 2012, 09:27 PM:

From The Sun's current issue, an article called "Please Don't Vote For Me":

Everything we feared about communism—that we would lose our houses and savings and be forced to labor eternally for meager wages with no voice in the system—has come true under capitalism.

Peace, truth, and righteousness to the candle-lighters (with Lori@59) and thanks to Sandy@33 for digging out the "pay-it-forward" aspect.

I've been fantasizing that all the debtors in a given bundle could abolish it collectively, at this rate of return. Of course that's merely fantastical, because the bundles aren't sold with names attached and for a no doubt long list of other reasons. But it's half of my response to etv13@48's "I'm not sure that getting a letter saying you've received this charity and asking you to pay it forward is a lot less emotionally burdensome than owing the original debt."

The other half of my response to etv13 is that many people know of the debtor's original debt, and some despise her for it. No one but the relieved debtor herself needs to know whether she chooses to "pay it forward." RJ's action may or may not alleviate any given debtor's personal emotional burden, but it will relieve her of some public condemnation.

#65 ::: Tom Whitmore ::: (view all by) ::: November 14, 2012, 11:07 PM:

Lee @62: I am quite convinced you're accurate on that. I'm (relatively) bright, and (relatively) sophisticated -- and I didn't really expect them to accept my offer. Fortunately, it was only around one card, one debt.

I expect that the law will let all the debt which has been purchased by a single company be under the "gotcha" you cite: but with companies purchasing lots of debts, it's not going to be clear which ones they own without (probably undoable) research. If you need to follow the route I did, I highly recommend asking for legal help (and there are free services in many states that will give you at least an initial consultation to help you figure out what's going on; and in most cases even if you have to pay it will cost you a lot less than working on your own). Using those services: often a case of Vimes' boots. Still and all -- use the help. You have a good chance of running into someone like TNH (cf "Black Top Hat and Moustache" in Making Book [if she's got a free link to the whole text, I'm sure she'll post it {tl;dr: sometimes the bureaucrats are on your side}]).

#66 ::: etv13 ::: (view all by) ::: November 15, 2012, 04:09 AM:

Jinnayah @ 64: I don't follow. How are people who condemn the debtor for incurring/not paying off the original debt going to suddenly not-condemn her because it was paid off for her by some third party's charity?

#67 ::: praisegod barebones ::: (view all by) ::: November 15, 2012, 06:09 AM:

etv13 @ 66: Because when you're solvent, a lot of people suddenly find themselves a whole lot less interested in the extent to which your financial status reflects your moral worth.

#68 ::: abi ::: (view all by) ::: November 15, 2012, 07:14 AM:

etv13 @66:
How are people who condemn the debtor for incurring/not paying off the original debt going to suddenly not-condemn her because it was paid off for her by some third party's charity?

That's not quite what Jinnayah @64 was saying (or what I read in the comment, at least.) The statement in question is:

many people know of the debtor's original debt, and some despise her for it. No one but the relieved debtor herself needs to know whether she chooses to "pay it forward." RJ's action may or may not alleviate any given debtor's personal emotional burden, but it will relieve her of some public condemnation."

People condemn/not condemn on the basis of existence/nonexistence of debt, without reference to how former debt is paid off. They don't get to find that out: the debt or lack thereof is in her credit rating, but the agency that closed it off doesn't affect her score.

People won't condemn/not condemn on the basis of the former debtor "paying it forward" or not, because they won't know whether or not she did so. Unlike debt, the nature and extent of private charity is not publicly available.

#69 ::: Lila ::: (view all by) ::: November 15, 2012, 08:20 AM:

glinda @ #63: I'm so sorry. Strength to you and your friend.

#70 ::: Lizzy L ::: (view all by) ::: November 15, 2012, 10:04 AM:

glinda at 63, I'm sorry.

#71 ::: Sandy B. ::: (view all by) ::: November 15, 2012, 11:20 AM:

Jinnyah@64 and others:

Ideally the "pay it forward" would be "here's how to pay it forward, should you find yourself with a few spare dollars and a wish to help" instead of a guilt-trip. That seems like a difficult and subtle piece of writing, and I don't know the actual phrasing.

#72 ::: Lee ::: (view all by) ::: November 15, 2012, 12:08 PM:

pgbb, #67: Yes. Including Mr. Yglesias, way back in the OP, who's still trying to decide which poor people are "more worthy" of assistance than others. Any statement of that type comes with an unexpressed assumption of "and which ones should be left to spiral down the drain and die because THEY DESERVED WHAT THEY GOT and should never, ever get another chance".

#73 ::: SamChevre ::: (view all by) ::: November 15, 2012, 01:38 PM:

Lee @ 72

I think you are being completely unfair to Matt Yglesias; his fundamental point is that in pretty much every case, rather than deciding what poor people need (or are worthy of) need and buying that for them, we should just give them money and let them decide for themselves how it would be best used.

#74 ::: etv13 ::: (view all by) ::: November 15, 2012, 04:17 PM:

abi @ 68: So are you taking "people," to mean "credit reporting agencies and their customers"? I was reading it more as "friends/family/neighbors."

#75 ::: abi ::: (view all by) ::: November 15, 2012, 04:23 PM:

etv13 @74:

The thing is, the credit reporting agencies and their customers act on that information in ways that friends, family and neighbors notice: the inability to rent an apartment, the inability to get a job if there's a credit check involved, things like that. And then come the questions, and the explanations, and there we go.

If one is on top of one's finances (whether one is in debt but managing it or is not in debt at all), they're a private matter. But once things start to go visibly to pieces, it's amazing how many people feel entitled to an opinion about the situation and the people in it.

#76 ::: etv13 ::: (view all by) ::: November 15, 2012, 06:06 PM:

abi @ 75: Right, but once those people are all up in your business, how do you maintain your privacy with respect to "the agency that closed [the debt] off" while simultaneously letting them know you are no longer in debt and thus relieving you of "some public condemnation"? Lying about it doesn't strike me as a great way of relieving a psychic burden, and surely it's going to take a while for the repayment of a long-outstanding debt to have a positive effect on your credit score and then percolate out into real-world-observable effects like a job offer or an apartment. Meanwhile, there are psychic burdens (for some people) associated both with being the recipient of unsolicited charity and with the request to "pay it forward" at some point in the future. (It may well be that the second helps with the first, of course.)

I seem to be devoting a lot of energy to a very minor point, so I am going to stop now.

#77 ::: etv13 ::: (view all by) ::: November 15, 2012, 06:11 PM:

Adding to my 76: I don't -- at all! -- mean to be foreclosing further conversation.

#78 ::: Lee ::: (view all by) ::: November 15, 2012, 06:32 PM:

SamChevre, #73: Go back and re-read the quotation referenced in the original post. If that wasn't what he meant, why is it what he said?

Also, your argument has already been addressed by Sandy B. here. As noted, we're not talking about a direct equivalence of effect. If we simply give them the money, even if they put it toward debt retirement, it does significantly less good because they don't have the leverage RJ can apply. And the intangible benefits of not being perpetually harassed by sleazy dunning calls are not to be sneezed at, either.

#79 ::: Tom Whitmore ::: (view all by) ::: November 15, 2012, 06:52 PM:

Echoing part of what Lee said @78: sleazy dunning calls really suck.

The leverage part is really important, too. I'm not going to try to think for people caught in the Slough of Debt Despond (I'm sure most of them think differently than I do, in some ways). But I do know that when I've been a a Slough of Despond, something that removes a source of that despondency is incredibly appreciated. And if I end up feeling some need to pay that forward, there's a name for the person who has that problem: and it's me. Nobody else gets to hand me that problem, and if it's a psychic burden: it's probably a whole (expletive) lot less of a problem than those continual, nagging, harassing and evil phone calls.

The treatment which prevents my leg having to be amputated causes a hangnail. Should I not take that treatment? Even if I have a particular phobia about hangnails?

I've gotten unasked financial charity from very slight acquaintances. I was able to pay it back quickly, and it made a big difference in my life to know that folks wanted to help in that kind of way. And I've given that kind of charity to (e.g.) help someone pay unexpected vet bills, and not wanted, at all, repayment. I think that what you're doing, etv13, is very kindly intentioned concern-trolling. At least, it would have been in my case either as donor or recipient.

#80 ::: Older ::: (view all by) ::: November 15, 2012, 07:34 PM:

etv13, you said "In theory they can garnish her wages, but it seems unlikely they'll actually do so" -- Whyever would you think that? My job brings me in contact regularly with people who owe money, and I can assure you that they *will* have their wages garnished if they can't figure out any other way to deal with the debt.

The debt, by the way, takes the form of bills to emergency rooms and emergency room doctors, or maybe credit card debt, or even foreclosure, but almost all of it is (I don't know of a case where it wasn't) medical in origin.

I feel compelled to argue with people who say "they were irresponsible to charge all that stuff on their credit card" or "they bought too much house for their income" ("so they deserve their troubles"), because It Is All Medical!!!

Where is the parent who will say "Don't set my daughter's broken arm, because I don't have the money to pay you"? Where is the doctor who will *agree* not to set the broken arm?

There are probably people who get into this kind of trouble through irresponsible spending, somewhere. I just haven't met any so far.

#81 ::: SamChevre ::: (view all by) ::: November 15, 2012, 08:09 PM:

Lee @ 73

The quote sounds to me like an argument for helping BOTH, not only the one that is by some measure "more worthy".

I'm in favor of the Rolling Jubilee as a publicity stunt; as an actual plan for helping the poor I'm more dubious. (Note that I've long thought that any time debt changes hands, the debtor ought to have the legal right to pay it off at transfer value.)

If I remember correctly from long ago, debt that is worth less than about $0.20 per dollar is generally debt that is not sensible to collect by garnishing wages--generally because it's too small or because the person owing it is too poor to have garnishable wages.

#82 ::: glinda ::: (view all by) ::: November 15, 2012, 08:10 PM:

Lila @69, Lizzy L@70

Thank you.

#83 ::: etv13 ::: (view all by) ::: November 15, 2012, 09:13 PM:

Lee @78: Patrick quoted three sentences out of a much longer post calling the Rolling Jubilee a "great idea," and the characterization of those three sentences as part of a "quibble" is not just Patrick's, but Matt's own. In the context of the post as a whole, I read the last of those three quoted sentences, which poses the rhetorical question "Of two struggling families, why would you think the indebted family is more worthy of help?" as arguing that the indebted family and the nonindebted family are equally worthy of assistance -- not that the indebted family is "less worthy".

Tom Whitmore @79: I have had my share of those phone calls, and I agree with you: they suck. And far too few people know (I didn't) that they have a right to put a stop to them under the federal Fair Debt Collection Practices Act (assuming they are coming from a "debt collector" and not the original creditor). The paucity of reliable, helpful information about what your rights and options are in that situation is a major problem.


Older @ 80: I think that for a couple of reasons:(1) I work at a decent-sized employer. What garnishments we receive pass across my desk. I see a handful each year. Of course we may not be typical, but based on what I know about our employee profile, if we are atypical, we likely would be leaning in the other direction. (2) The implication of all that "leverage" people have been talking about upthread (up to 95% discounts) is that we are talking about old and very marginally collectible debt, probably not held by the original creditor. They would not be selling it to the Rolling Jubilee people for five cents on the dollar if it were easy and inexpensive to get a judgment and then enforce it by garnishment.

#84 ::: Lee ::: (view all by) ::: November 15, 2012, 10:14 PM:

SamChevre, #81 & etv13, #83: Okay, now I'm really confused. The entire purpose of RJ is to help those who can be helped in this particular way; "worthiness" doesn't enter into it at all, only data. In fact, the whole concept of "worthiness" in this context is a red herring.

When you start bringing up poor people who don't have this kind of debt... that's a different problem entirely, and one which is already being addressed by a number of charitable programs both religious and otherwise. But until now, no one has looked at the possibility of addressing this particular issue.

Also, most of the debt collectors under discussion here are not going to pay one whit of attention to the Fair Debt Collection Practices Act, because they know they'll be long gone before the Feds could catch up with them. And as soon as another fly-by-night buys up the list, it's all to do over again -- because, as noted, they never actually take anyone's contact information OFF the list. That list is the only genuine asset they have; they're not going to do anything that might diminish its value.

#85 ::: Cally Soukup ::: (view all by) ::: November 15, 2012, 10:21 PM:

If they never actually take anybody's name off the list, how do we know they'll take names off the list once paid? Frankly, I wouldn't put anything past those people.

#86 ::: etv13 ::: (view all by) ::: November 16, 2012, 02:02 AM:

Lee @ 84: I was just responding to your comment 72, characterizing Matt Yglesias as trying to decide which poor people were more worthy. My point (and I think SamChevre's, too) was simply that I think that misreads what Matt was saying. He starts by saying Rolling Jubilee is a "great idea," diverges into a "quibble" about one of his frequent hobbyhorses -- the best way to help poor people is to just give them money and let them spend it in accordance with their own priorities -- and then circles back around to say (I am paraphrasing very loosely here) if Rolling Jubilee is a gimmick that inspires people to want to help in that particular way, go for it. He wasn't talking about which poor people are more worthy.

I would add that debt isn't just a problem of poor people, although, like virtually everything else, it is much tougher for poor people. Middle and upper-middle-class people whose insurance coverage falls short, or who lose their jobs or take steep pay cuts due to a failing economy, can find themselves burdened with more debt than they can sustain.

(I never noticed that Spelling reference before. Has it always been there?)

#87 ::: Dave Bell ::: (view all by) ::: November 16, 2012, 03:52 AM:

It is beginning to look as if Medical Costs are a major drag on the whole US economy, and are inflated, in part, to pay for a system of debt collection which is flawed and frequently seems dishonest.

Compare this with taxation-funded medical care. The IRS is already in place and I doubt the collection cost, as a percentage, will increase. The total cost is also reduced by the minimisation of interest payments, and the prompt treatment of medical problems when not delayed by fear of the bills.

None of this need reduce the net payment to providers of medical services.

As it is, the wretched refuse of your teeming shore is a target for the cream-skimming scum of a frequently criminal, amoral, financial industry that de-circulates America's abundant wealth.

#88 ::: abi ::: (view all by) ::: November 16, 2012, 05:02 AM:

Dave Bell @87:

One of the costs in the American system that UK people won't quite get is the cost of market friction.

From what I can gather, most doctor's offices in the US employ at least one person whose full time job is to negotiate with insurance companies. They explain charges, query denials, negotiate rates, and generally mesh systems with multiple different companies, each of whom use different classification systems and have different things they will pay and deny at different rates.

Of course, the insurance companies then have to pay the salaries of the people on the other end of the phone from the people in the doctor's offices. And both sides of the conversation are part of the cost of medical care in the US.

On the other hand, those are all jobs, so in some ways, it helps the American economy, since all those people then receive salaries and spend money. But it's a huge and costly way to have those jobs in the economy. Anyone who wants to tell me that markets are "inherently more efficient" in health care has a big hill to climb because of it.

(Dutch doctor's offices don't have that kind of friction, because the government regulates the hell out of the insurance companies; they all use the same classifications for treatments, and policies tell you—using the classification numbers—what is and is not covered. Up front and comparably.)

#89 ::: Nancy Lebovitz ::: (view all by) ::: November 16, 2012, 05:35 AM:

The idea that anything which creates jobs is good is called "the broken window fallacy" (not to be confused with the broken window theory of law enforcement).

The idea is that societies do not become richer by the equivalent of people digging holes and filling them up. The work which is created by repairing a broken window is easy to see, but it's not as obvious that the people and resources could have been doing something more useful.

#90 ::: Sandy B. ::: (view all by) ::: November 16, 2012, 11:59 AM:

@87-88: I'm not sure how to correctly phrase this, which may mean I haven't thought it through. I've heard 30% (or similar) of the cost of medical care is this sort of insurance/doctor dance. There is a direct benefit to insurance companies (fewer claims paid) to making things hard for the doctors and patients.

Is it appropriate or reasonable (... constitutional? I'm not sure of the phrasing) for the Federal Government to set up a single set of documents, classifications, etc. that all insurance companies must use? Or that all insurance companies should use, or they incur economic disadvantage? For reference on that latter one, I'm thinking the way the states were encouraged to raise drinking ages: "You don't have to have a 21 drinking age, but if you do not we will cut your highway funding."

30% reduction in medical costs would make a hell of a difference, and the insurance companies would only lose a small portion of that- figure around half of that 30% is currently being spent by the insurance companies on bureaucratic blocking.

#91 ::: SamChevre ::: (view all by) ::: November 16, 2012, 12:57 PM:

the Federal Government to set up a single set of documents, classifications, etc. that all insurance companies must use?

We had that up until the late 70's or early 80's (I think 1983 but can't quickly find a reference; it was replaced by the more flexible system we have now in an attempt to enable HMO's and other forms of non-fee-for-service billing like DRG's.

#92 ::: Dave Bell ::: (view all by) ::: November 16, 2012, 01:55 PM:

abi and others.

There is a difference between the money paid to the people who do the work involved in managing insurance, who spend a lot of it on simply living in America, and the money that is taken out as profit. There are good reasons for profit existing, in any operation, but it is easily developed into what Marx called Rentier Capitalism. That's still a useful label.


#93 ::: Sandy B. ::: (view all by) ::: November 16, 2012, 04:37 PM:

I am now looking forward to the "Money Spent/Debt abolished" category next to the "Money raised" category on the Rolling Jubilee front page.

Too soon?

#94 ::: Older ::: (view all by) ::: November 16, 2012, 07:35 PM:

etv13, it sounds like you have pretty good reasons for your opinion. As it happens, so do I.

Without divulging any personal information, I can tell you that I have seen garnishments for recent debt, often still held by the original creditor, for as little as a few hundred dollars, to extract money from the paychecks of people working at (among other places) fast-food businesses -- where, as you probably know, most employees make minimum wage or very very slightly more, and usually do not get 40 hours per week, because the employer is seeking to avoid having to provide benefits. Which of course is why the debtors have unpayable medical bills in the first place.

My job is one that breaks my heart daily, and that others would do it if I didn't is not really comforting. Nor is it a comfort that I really need this job, because even excellent medical insurance, which I have, couldn't protect me against the secondary effects of long illness.

#95 ::: KayTei ::: (view all by) ::: November 16, 2012, 10:30 PM:

Sandy B @ 90

Are you thinking of something like the ICD 10 codes?

The idea I like, which takes what we have a step further, would require the government to establish a central billing protocol that all insurers would be required to use, so that doctors only have to learn one system of hoops.

I think that means that the answer to your question is that yes, this could be done. And yes, we think it would cut costs. And no, I can't remember offhand if anyone is already doing it (at the State level) or planning to (federally). If not, it may be another 10 years before we have the political capital to re-engage on health insurance law. Right now, politicians seem to be digging in their heels about letting the changes they just made settle out before they make even more changes.

#96 ::: etv13 ::: (view all by) ::: November 17, 2012, 02:26 AM:

Older @ 94: I'm really sorry you have a job that is distressing to you. I wish you all the best.

I am deeply relieved that the election results mean the Affordable Care Act is going to stay in place. It's not enough, but it's a step in the right direction.

#97 ::: Lori Coulson ::: (view all by) ::: November 17, 2012, 11:14 AM:

Sandy @90, KayTei @95:

The U.S. government DOES have a system where the codes for medical procedures are standardized -- Medicare.

If Congress had done the intelligent thing and gone single payer, i.e. "Medicare for All," some monies would have been saved just from having a standardized system of medical codes for billing.

#98 ::: grendelkhan ::: (view all by) ::: November 17, 2012, 08:52 PM:

Here's someone who works with debt saying that they're paying too much.

But in any case, the secondary debt market is so gigantic that this is more of a symbolic gesture for almost everyone involved (though if you're getting your medical debts written off, it's far from symbolic).

The point here, I suppose, is to show how incredibly crazy the system as it stands is, that regular people are shunted into debt slavery while the wealthy can cheat their way out of it. And if there's enough populist rage about that--I certainly didn't know about this--well, maybe that'll be enough impetus for things to change.

#99 ::: Older ::: (view all by) ::: November 17, 2012, 09:55 PM:

etv13, one of the things that makes my job less onerous is that I am often able to help people in debt in some small way. I can tell them for instance how to avoid the court cases and the garnishments, if they start early enough (keep in touch with your creditors). And for a couple of years I was saying to every one, "write your congress people and say that we need single payer health care". I tell them about their rights as borrowers (no longer necessary, actually, since my state passed a law requiring this information actually in the documents I deliver).

And sometimes, I hug them and cry along with them -- because sometimes you just gotta. One guy broke down and started crying and told me how he had lost his job, and his family, and now he was going to lose the house, and I ended up coming back to leave a bag of cookies on his door with a note saying that I was thinking of him.

I also am very very glad about the Affordable Care Act, and I know that it is the seed of a real system of care, if we can keep it.

Another bright spot is that there are more and more cases where the holder of the mortgage is being required to prove that they do actually hold the mortgage, and some of them *don't*. In that case, judgment is for the owner of the mortgaged property, and this is a huge win for the owner. I have met several people who have come out on the right side of this.

#100 ::: KayTei ::: (view all by) ::: November 17, 2012, 09:57 PM:

Lori @ 97

I agree 100%. But right now, the insurers all do whatever they please. And while they do use Medicare billing codes, my understanding is that each insurer has their own systems, required supplemental documentation and etc. I believe that the standard billing mechanism they use to bill doctors is not standardized, which is one reason billing is so complex and there is a trend of doctors refusing to accept insurance. I'd be interested to hear otherwise; I admit my information may be a little stale on this point recently.

#101 ::: Older ::: (view all by) ::: November 17, 2012, 10:14 PM:

etv13, another thought concerning debt, and the collection thereof. Not all debts that are held by entities other than the original creditor are "old and marginally collectible". Some companies make it a policy not to hold debt, and they resell it early. Mortgages are commonly sold by the original holder, and many people are more mortgaged than they would like to be, or are missing payments, because of medical expenses. My current mortgage has been sold several times. I get a notification, but I don't get any choice, unless I am capable of paying it off right now. I have not missed any payments, partly because of my very excellent medical insurance (I'm a federal "retiree", although I was not able to stay retired), and partly because of how I set my priorities. I've had to give up a lot, but I refuse to give up the house.

One of the people I talked to last year was a 75 year old man, who had had an illustrious career, and who was entirely able to make his payments, but he had missed one when his mortgage was sold, and he could never catch up, because he sent in a payment for the wrong amount, and it was refused, and after that he was constantly "late" and the "late charges" piled up, and as is typical, no one answered the phone at the new company's office. My advice to him was to get a lawyer, and get an expensive one; don't economize. I saw recently that he is still in his house, so I guess it worked.

#102 ::: Stefan Jones ::: (view all by) ::: November 18, 2012, 11:09 PM:

This strikes me as a wonderful idea:

http://mikecanex.wordpress.com/2012/11/16/i-want-to-see-jubilee-fines-imposed-from-now-on/

Shorter version: When a bank is found to have done wrong and the government is going to impose a fine, the bank is instead required to directly forgive the equivalent debt.

#103 ::: albatross ::: (view all by) ::: November 20, 2012, 01:45 PM:

Dave #92:

The whole occupation of insurance company employees and doctors' office employees facing off in complex zero-sum games over trying to make the other pay for stuff/keep from paying for stuff is a net loss to mankind. It's irreplacable wealth being shoveled into a fire, much as it would be if all those people were being employed to dig unneeded ditches and then fill them in, day after day.

That's an entirely separate issue from the profits being made by the investors in insurance companies, or the generous salaries and bonuses paid to their management, or the interest paid on their bonds, or whatever. You can have one without the other. Further, whatever is behind the endless inflation in US medical costs, it's not just profits or executive salaries. Neither of those things can account for where most of the wealth is flowing into medical care/insurance.

#104 ::: Omri ::: (view all by) ::: November 28, 2012, 10:01 AM:

The question you have to ask yourself here is “why is this a better idea than just giving money to poor people”? And I think it’s hard to answer the question. Given two struggling families, one of which is indebted and one of which isn’t, it’s not clear why you’d think that the family that’s borrowed heavily in the past is more worthy of assistance.

The thing is, you don't have to ask this of yourself. You can be a Benthamite/Stuart-Mill-(ist? ite?) and say "does this benefit the common good?" And then ask yourself: "do I or the common good benefit from giving a flying fuck how the beneficiaries of Rolling Jubilee got where they are?"

IMO, the answer to the latter question is "no."

#105 ::: Sandy B. ::: (view all by) ::: May 30, 2013, 06:04 PM:

Just ran into this old thread while looking for something else. RJ did a million-dollar debt abolition (at a cost of something like $20,000) back in March.

One million down, several million to go.

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