The People Bail Out the People

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Last week, the members of Strike Debt, a group of Occupy activists working to help Americans dealing with debt, launched a new campaign called The Rolling Jubilee. The initiative — a clever plan to collect money, buy up other people’s debt and forgive it — kicked off on Thursday with a variety show in New York dubbed “The People’s Bailout.” The show, live-streamed over the Internet as a telethon, raised enough money to cancel over five million dollars of debt.

View a slideshow of the event.

In canceling the debt, the Strike Debt team is taking advantage of a fairly common banking practice. When debt is severely distressed — that is, when debtors aren’t paying up – banks write the loans off their books. But they often sell the debt for less than the loan was worth to recoup some of their losses.

Strike Debt is working with a debt purchaser to buy distressed medical debt for about five cents on the dollar. Then Strike Debt cancels it, freeing debtors who were unable to pay their medical bills.

Americans owe over $11 trillion in debt. Over $1 trillion of that is student debt. Sixty-two percent of bankruptcies are caused by medical bills, and that figure rose by 50 percent between 2001 and 2007.

The People’s Bailout featured over a dozen performers and speakers — folk singers, rappers, magicians, comedians, Catholic nuns, a professor, a journalist — all of whom appeared for free to help Strike Debt raise money and share the message that debtors are not alone. “Debt is a tie that binds the 99%,” was one frequently-repeated phrase. A large sign on the wall read “you are not a loan.”

The show closed with three songs performed by an unlikely pair: Guy Picciotto of Fugazi and Jeff Mangum of Neutral Milk Hotel. Mangum has only started performing again recently after a decade of reclusion.

The crowd celebrated when Strike Debt announced that they had raised enough money to cancel over $5 million of debt. (John Light)

The name “The Rolling Jubilee” was based in the ancient idea of a “jubilee year.” “The jubilee … comes out of the Abrahamic religious traditions,” humorist David Rees, one of the masters of ceremonies, said. “The idea of abolishing debt — freeing slaves literally and metaphorically — is a very powerful, very human impulse that we want to update for our new century.”

There was an air of moral imperative — and, sometimes, religiosity — to the event: Two reverends spoke, a gospel choir sang and a group of Catholic nuns, the Sisters of St. Joseph, talked about debt.

During the evening, many of the performers suggested that, in the past few weeks, Occupy has honed in on a purpose, turning ideas into action through initiatives like the Jubilee and Occupy Sandy. At the People’s Bailout, the Strike Debt team hit their goal of raising enough money to purchase and cancel $5 million in debt, and the funds have continued to — well, roll in.

As of yesterday evening, Strike Debt had raised enough to abolish nearly $7 million of debt, and the Jubilee is still continuing. In this video featuring members of Strike Debt (including Linnea Palmer Paton and Amin Husain, both of whom appeared on Moyers & Company last year), the group explains their goals.

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  • Linda Oltmanns

    Seems like I read something very clearly like the “Jubilee” in the Old Testament, Jewish law after seven years, they excused the debt. I probably have my facts wrong, but I know the Jewish people had the same concept. Either way, it works wonders in people’s lives, that’s for sure.

  • rknester

    Do they choose carefully? If people lost their property because of unforeseen medical problems, for instance, that’s a good debt to forgive. Chances are, it won’t happen again.

  • Anonymous

    In the article, it says “Strike Debt is working with a debt purchaser to buy distressed medical debt for about five cents on the dollar.”

  • Karen

    This is one of the most beautiful things I’ve ever seen. I nearly cried.

  • The Other Katherine Harris

    Once a creditor writes off a debt — and thus applies it as “bad debt” to reduce income for tax purposes — it shouldn’t be allowed to rise from the dead and recirculate! How is it that creditors can take the benefit of these losses and yet sell them, too? The value’s been struck off already. This practice plainly should be illegal; it’s a scam. Yeah?

  • John Pratt

    If they are working with a debt purchaser to purchase debt at 5% someone is getting taken. I am in the debt buying industry. I wrote a book about it. The debt they want to buy can be purchased for about 1% to maybe 2%. I have offered my help at no cost but have heard nothing from Strikedebt. I guarantee if they are paying 5% the people giving are not being well served.