Debt Jubilee: It was impossible, and now it seems inevitable

Welcome to Winning Wednesday!

Talk about the Overton window!  This is how it gets moved.  The group Debt Collective, the nation’s first debtor’s union,  says “When we first raised the demand for student debt cancellation during Occupy Wall Street [nearly 15 years ago], the media scoffed. In 2020, thanks to our efforts, most Democratic candidates in the presidential primary ran promising some degree of student debt cancellation.” 

Now, Connecticut has become the first state to cancel debt for their people.  Gov. Ned Lamont announced on Feb. 2 that the state is using $6.5 million of ARPA money to buy ONE BILLION DOLLARS of medical debt – and wipe it off the books.  A quarter of a million Connecticut residents will get the debt monkey off their backs by the end of this year, at the latest.

Changing common sense, and using leverage

A story in Mother Jones captures both the change in “common sense” that had to happen, the simple mechanics of how debt cancellation can be done, and how much it improves people’s lives.

“The idea that these debts aren’t carved in stone, which is what they feel like—changing that as a norm has to start somewhere, and they started it,” said Eileen Connor, a Debt Collective collaborator who directs litigation at Harvard Law School’s Project on Predatory Student Lending.

An Occupier named Thomas Gokey had the initial idea. He found a debt broker (they buy debt for pennies on the dollar) who agreed to sell him about $400 worth of credit card debt for nine people. Their $14,000 in debts were now Gokey’s to do with as he pleased.  He cancelled them! 

Gokey and other Occupiers then took the lead on organizing “The People’s Bailout,” a fundraising telethon featuring famous friends like comedian Janeane Garofalo and members of Fugazi and Sonic Youth. They hoped to raise $50,000, but eventually brought in $750,000—enough to buy about $32 million worth of debt on the secondary market, clearing the debts for some 9,000 people.  They’ve also written a book on it.

Medical Debt Cancellation Grows

Another group called RIP Medical Debt, formed around the same time, is doing the same thing for medical debt.   They have campaigns in Miami-Dade County (FL), Georgia, and Indiana.  New York City is doing it, and Cook County (Chicago) did it as well.  I’m so excited to see what they all do next.