Our survival response is hemmed in by financial contractual obligations that were entered into under conditions radically different from the present. Many need to be readjusted, many need to be cancelled. Last time we faced disruption of this magnitude was after the Civil War. 1/
The New York Times of Nov 6, 1865 reported "The debts of the Confederate Government, contracted for the purposes of war, and for all other purposes, were swept away when the Confederacy fell." Reasoning like the Reconstruction governments, Johnson argued: 2/
"it should at once be made known, at home and abroad, that no debt contracted for the purpose of dissolving the Union can or ever will be paid by taxes levied on the people for such purpose;" nytimes.com/1865/11/09/arc… 3/
Virginia was a special case in that it had contracted massive debt before the war. African Americans argued that they had no part in debts contracted while they were enslaved and the ability of Virginia's new economy to service those debts had been reduced by 2/3. 4/
A multiracial coalition, the Readjuster Party, formed in Virginia in 1878 with a platform that foreshadowed FDR's 2nd bill of rights and @BernieSanders, that started with readjusting the pre-war debt. 5/
William Mahone, the most high profile Readjuster leader, warned after a calculation on the back of an envelope summing to $45 million, now at the Library of Virginia, of a humanitarian catastrophe if the debt was not reduced. 6/
We again live in times that nullify the conditions under which debt contracts were incurred, challenge whether some were ever valid, and make their service impossible to an unforeseen extent that pits paper obligations against physical and social survival. 7/
The Readjusters came to understand what #MMT now makes clear: that monetary economies are creatures of the state, embedded in state power and ultimately in human society; that if they no longer serve the imperative of survival, readjustment is unavoidable. 8/
MMT illuminates our national currency is an accounting unit that the US government can use to organize our productive capacity by simply crediting the appropriate accounts, up to and beyond relative levels of mobilization it used to win WWII. 9/
We must immediately suspend the enforcement of some contracts and cancel others all together. We cannot let paper commitments disrupt our survival response under any circumstance. Evictions, foreclosures, and utility cutoffs are acute threats and are being stopped. 10/
Paper barriers to expanding and accessing our medical system must be removed. Debts for past care provided must be suspended and #M4A care going forward must be of no charge. Past medical debts thus make no sense if providers no longer depend on them for solvency. 11/
Most important, and being lost in the scramble regarding acute needs: we must #CancelStudentDebt -- all of it. This is most important because as humans we depend on society for our survival. In the US, the perverse innovation of student debt was already a source of crisis. 12/
Student debt is a record of liabilities, almost entirely on the books of the federal government--effectively taxes, streams of future punishments in the form of canceled income levied on people whose FAFSA showed were from working class families but presumed to an education. 13/
This social experiment was never legitimate, the crisis it wrought was real, even impacting our fertility rate. Now, backed by some of the most severe contractual terms, it impels life-threatening behavior. For future oriented, social, humans, default threat is existential. 14/
Student loan default forecloses career paths around which many borrowers built their identity over nearly their whole life of striving and excelling with respect to social expectation conveyed to them. Its relentless collection forecloses the rest. 15/
Student loan debt impels, more deeply than other debt, resistance to social distancing and quarantine. It also more profoundly damages the future planning that is the essence of society, both for its severity and for the potential education has invested in debt's victims. 16/
Our top priority in removing contractual barriers to our survival response should be to #CancelStudentDebt . It relieves acute enforcement threats and unlocks future-oriented resilience that will be vital to a viable social fabric after the virus. 17/
Relieving contractual obligations takes precedence over cash payments. 💵 payments are a blunt instrument against unknown contract enforcement vulnerabilities. They also presume a recipient in a condition competent to act and depend on market supply of competing vital needs. 18/
The language in H. RES. 897 that implies $1,000 payments address the problem of student loans shows a deadly monetary confusion. Public, not tax payer, money is created when spent. 1k mobilizes only what mkts will. It leaves in place the relative punishment of student debt. 19/
The benchmark references on:
- fiscal response to the crisis: levyinstitute.org/publications/t…
- the fallacy and fraud of the student loan social experiment:
currentaffairs.org/2019/09/cancel…
- how to #CancelStudentDebt , modeled under conservative assumptions:
levyinstitute.org/publications/t…
20/END
- fiscal response to the crisis: levyinstitute.org/publications/t…
- the fallacy and fraud of the student loan social experiment:
currentaffairs.org/2019/09/cancel…
- how to #CancelStudentDebt , modeled under conservative assumptions:
levyinstitute.org/publications/t…
20/END
