One year later, Occupy has a brilliant new plan: A people’s bailout

Occupy Wall Street has a great new answer to all the doubters who ripped on them over the past year for not having a specific enough plan.

It took a while, but a new offshoot group that grew out of Occupy called Strike Debt has a highly specific, highly brilliant plan for how to improve the lot of the 99%: It’s called Rolling Jubilee, and it’s basically a crowd-funding campaign to buy up big swaths of people’s debt and simply cancel it. It’s sort of like the economic equivalent of buying slaves to free them.

Here’s how it works: All kinds of debt, from student loans to credit card to mortgages, are sold by the people who originally made the loans to collectors eager for the chance to take the interest payments on those loans for years to come. Loans get bundled into big groups and sold as securities on the open market. Rolling Jubilee will raise money through crowd-funding and use that money to buy bundled loans like any other institution—but once they own the debt, rather than collecting on it they’ll simply cancel it.

You’ve probably heard of a simliar thing happening when Freddie Mac and Fannie Mae buy mortgages from banks or debt collectors buy debt from credit card companies—one day in the mail you get a notice saying, Your debt is now owned by this guy—please keep paying. In this case, however, you’d get a note saying, Your debt is now owned by Strike Debt, and they’ve voided it—your balance is now $0.

Sound too good to be true? Well, there are a couple ways this doesn’t work: First, you can’t ask the Rolling Jubilee to please personally pay off your student loan. The Jubilee will be buying securitized debt bundles just like other institutions, which means they’re not targeting individual loans. Incidentally, the individuals paying these loans have no idea that they’ve been “bundled.” So while you may choose to donate to the Rolling Jubilee there is no guarantee that it’ll personally benefit you.

There’s also some doubt as to whether banks will be willing to sell loans to the Rolling Jubilee. Business Insider cites an example from the mortgage industry in which banks as well as Freddie Mac were unwilling to sell mortgages to people not planning to collect on them.

But if there’s one thing we know about banks it’s that they tend to buy and sell all kind of sketchy stuff. If they can get their asking price for bundle of loans, there’s no reason to think they’d be constitutionally unwilling to sell them to the Rolling Jubilee—it’d go against everything they stand for.

So while donating to the Jubilee may not help you specifically, it will probably help someone. And it may well help you—it’s like a lottery. And the best part: every dollar they raise has a huge multiplier effect. If you have $10,000 in student loan debt, by the time you pay it off over a number of years with the interest factored in you might actually pay $30,000, not $10,000. The project doesn’t even officially kick off until November 15, and they’ve already raised $93,000 to cancel $1,877,000 worth of debt over the life of the loans.

And we’ve all seen how powerful crowd-funding can be when it rallies around a common cause. A fundraising drive for Karen Klein, the bullied school bus monitor, this summer raised $683,000 for one person. If Rolling Jubilee raised that amount it’d erase $20 million in debt for individuals.

And aside from the positive of debt relief, the Guardian points out the other benefit here is that newly debt-free people will have new spending power, and their increased spending will boost the economy.

I donated a small amount to Barack Obama’s campaign in 2008 but I didn’t this year—it just disgusted me too much to watch billions of our hard-earned dollars pile up just to broadcast attack ads back in our faces. After the last four years, it seemed there must be something better to spend our money on. I’ve decided to donate what I didn’t to the Obama campaign this year to Rolling Jubilee. If the amount raised for Obama’s re-election campaign is matched by Rolling Jubilee, it’ll erase more than $30 billion in consumer debt and who knows what kind of economic growth it’d kickstart.

Brilliant plan, right? And the best part, it’s totally non-political, non partisan, and it doesn’t require Congress to pass any new regulations. It’s a people’s bailout, and the idea is to harness the power of people to impact the economy at a large scale, rather than depending on the government. It might have taken a while, but OWS has answered with a plan, and their plan kicks ass.