Debt Community Gathering - 17 Dec 2012
Debt Community Gathering - 17 Dec 2012
Approximately 15 people attended tonight's community gathering.
Most of the time I've been teaching at Salem state, around 80% of my students thought the US was democratic. During the last three semesters, that number has dropped to 20%. That's a sample of one class, but it's something.
An easier way to make the point -- you can pay for education beforehand, or you can pay for it after. Many countries have free education before, and higher taxes after. You don't need to be very radical to see that makes sense. If you have a better income, you have more money to pay for the things you'd like to have.
If you are a trash picker in France, you get five weeks vacation. If you're a mid-level manager in the United States, you get 2--3 weeks tops.
30 years ago, 95% of the people going to college could work a minimum wage job, and graduate debt-free in four years. Neo-liberalism privatized everything. Taking money out is great for the super-wealthy. The trends of defunding education and increased military spending brought us to where we are today. We just need to reverse this trend. We can go back incrementally. For example, lower the social security age 1 year every year, until everyone is covered.
What you've said about neo-liberal is really correct. When schools are defunded, wages go down. There are groups who want to reduce public education funding because "government is bad"; the religious right wants to reduce education funding, because they send their kids to private schools. To fix our infrastructure, we borrow money from private institutions, and those loans are guaranteed. It's worldwide austerity. The day NAFTA went into effect in Mexico, the Zapatistas started an uprising. Wasn't just because of taking away communal lands, it was because NAFTA threatened to kill them as a community and as culture. They've been able to maintain their uprising for 19 years.
I read a book this year: Stieglitz "The Price of Inequality". It's very a readable book about economics and it talks about how wealth was transferred upward. It's about why Occupy makes sense. It's worth reading.
Stieglitz is a left liberal. If you want to find a time where things were working well, look at US between 1945 and 1975. It wasn't utopia, but things weren't all that bad.
(We pause to do introductions.)
76% of people are in debt, and much of that is linked to medical debt. Part of this is due to the fractional reserve system; the reserve system allows banks to lend money out of nowhere. A bank only needs $1000 to lend $10,000. A bank can survive one bad loan, but if all of them go bad, the system falls apart. This is what happened a few years ago; people realized that bonds, etc, had no value, and they started spiraling downward in value.
Governments borrow from the private sector to cover what they don't make from taxes, then they repay those private sector debts with taxes. It's a delayed payment of taxes to the banks. Services get privatized, and the wages tend to come down. Privatization is another way of redirecting social surplus. A lot of scams reinforce this. For example, changing the day that your interest is paid, or your payments are due.
Have you heard of contracts of adhesion? They're the "click here to agree to terms and conditions" things you see on the web. Most of these contracts require you to give up your right to sue in courts. It's not a contract between two free parties. It's a contract with one free party.
This is all linked to two trends: (1) financialization of capital. It's easier to make money through interest than through making goods. (2) Austerity, which is another way of shifting social surplus. In US, these trends work largely through privatization.
In Greece, the banks said "if you're going to default, then we're going to destroy your country, so have another election".
Argentina and Iceland have gotten away with letting their currency go into default. Argentina had around five presidents in a month. The IMF tried to impose austerity measures, and Argentina wouldn't stand for it. Currency itself is an agreement, it has no value unless two people agree to it.
Tinkerbell economy: the economy works because you believe it does. When Tinkerbell disappears, then you have an depression.
The fiscal cliff is another form of austerity; it's a way to force unnecessary cuts to social services. Naomi Klein has a book called Crisis Capitalism -- it's about creating crises to force restructuring of economic systems. Austerity is frequently multi-faceted, and not blatant. We're told that they only way to improve the economy is to create jobs, and the only way to get good jobs is to destroy the environment.
Globalization, in the sense of extending the simplification of production. Less skilled workers do everything, you use labor where it's cheapest, and shipping has become less expensive over time. We've reduced consumer buying power. People shop at Walmart because it's all they can afford, and this reinforces the need for low-priced imported goods.
If minimum wage had continued rising with productivity since the 1970's, then minimum wage would be 25.00/hour, and not $7-something/hour.
In Iceland, they jailed a lot of the bankers. But Iceland is a little country with a small effect on the world economy, so they were able to get away with doing that.
The Debt Resistors Operations Manual (DROM) has a lot of practical methods for helping people stave off debt on a day to day basis. To be effective, we need to focus on both collective and individual actions.
Last time, we were lucky enough to have one of the Strike Debt people to talk about their work. Strike Debt wrote the DROM. They met every week for months, and different groups worked on different projects. The DROM was one of the projects.
Jubilee is tradition of forgiving debt on some particular occasion. Strike Debt discovered that distressed medical debt could be bought for pennies on the dollar. They found ways to purchase this debt, and held a telethon to raise money to purchase it. OB contributed $500 to this cause. Their goal was $50,000 to buy a million in debt. They've raised nearly $500k, and have purchased (and forgiven) several million dollars in debt. Their goal is not to solve the debt issue; they were more interested in drawing attention to it. This campaign captured the love of mutual aid, which has always been a key part of Occupy.
People asked, can Occupy pay my medical debt? There are a few reasons why this isn't possible. First, there's tax liability. Payoffs had to be limited to $11k, to avoid gift taxes. Also, when debt is sold, it's packaged together like a stock or bond. When you buy the debt, you get a package, and you don't know who's debt is in the package.
Strike debt has been helping affiliates form all around the country. (We haven't become an official affiliate yet). They've done a series of debt assemblies, where people get together to talk about debt. There's a lot of shame associated with debt. Coming together and talking about it had the effect of raising consciousness. People realized that what they thought of as personal issues were really systemic, and it was a transformative process.
There was a book launch for DROM. Even there, there were a lot of people who had shame around their debt, and were astounded to find others who felt that way.
Strike debt is doing symbolic burning of debt notices.
Debt assemblies help consciousness, but they also give you a way to take it further.
We have a debt boulder. It's sort of a street theater prop that's made appearances in several of our demonstrations.
Strike debt has a variety of groups. Different tactics apply to different kinds of debt. Writing letters to your creditors to dispute every little inaccuracy in your credit report is a practical tactic. Also having old items removed from your credit report. There's a tension between having the debt, and trying to chip away at it.
There are programs to pay back student loan debt, but these involve working for the military, a non-profit, or a govt. agency. There are different goals: if you're not in debt, stay out; if you're in debt, how do you get out of it? With student loans, we're seeing that people aren't earning enough to repay them. What are people able to do? Work two jobs, file bankruptcy (not for student loans)?
The Obama administration recently started an initiative: after 20 years, under certain conditions, the remainder of your student loan debt can be forgiven. The administration has started offering to make deals with debtors. They're being far more accomodating. This is a very recent development. Collection agences aren't going along with the program because they want to; it's because it's the only way they'll be able to collect. You have to be in certain programs in order to qualify.
Student loan repayment can be capped at a certain percentage of your income. There are other programs; like teaching, or working for a non-profit.
Here's a wringer that got some people. If you started off with $35,000 in loans and paid according to plan, you ended up with $41,000 remaining. If that was partically forgiven, then the IRS would swoop in an try to collect taxes on the amount forgiven.
We could turn OB into a 501(c)3, and pay everyone a salary a dollar per year :) Their student loan debt would be forgiven, by virtue of working for a non-profit.
There's a lot of students who have awful student debt. If we could find someone who really knew about these student loan relief programs, we could do an informational event. We should also ask people what created debt in the first place. Medical debt might be hard to organize, because of the shame issue. It might be easier to form a campaign around student debt.
Congress has to power to change any law, including the law about student loan debt being excluded from bankruptcy.
When I first came to Boston, I saw someone down by BU wearing a T-shirt that said "Boston University ... 0 to 60,000 in four years". A few days ago, I was talking to a Berklee student and mentioned this T-shirt. We reaction was "wow ... $60,000 ... that's it ?!?"
At some universities, there's already organizing around tuition hikes, which gives us something to tap into.
We have 250,000 college students. Having a cultural event to involve them could be a good move. How would college administrations react to this? It could be a way to coalesce.
The advantage of medical debt, is that it's void of moral hazzard. Student debt might have moral hazzard (i.e., they could have gone to a community college). I'm not saying we shouldnt' do it; I'm just saying there are things we should think about.
We probably won't solve anything. The point is more about building awareness and involvement. I'd like to weave organizing around student debt with organizing around labor issues. If we can get regular meetings around student debt, salt that with other issues that are relevant to their lives.
We should start planning for a big action, along the lines of what you're talking about. And we could plan something else on medical debt. Our resources are limited. We don't need weekly events. Maybe something in two months, and then something another two months later. Build networks of people and get them working with each other.
It's not just students with student debts. Once they finish college, that's when the debt really hits. There are tons of people in boston who are post-college, and are trying to pay off their loans. In Occupy, we saw lots of people who graduated college and couldn't repay their debt. I think this is winnable. By that, I mean that things can't go on like this -- people not being abot to pay off student loans. Something has to change.
I don't have a house or car, so there's little incentive for me to want to pay off student loans. Most of kids who graduated with me have bullshit jobs. I think that so many people will default.
As with the AIDS crisis, I think there are many people privately dealing with their trauma. Silence is Debt. Your are not a loan. I'm happy to make T-shirts, so we can start spreading the message around. We need to start creating the giant iceberg that will crash the ship of state with debt. We have the facilities to make T-shirts, we just need the shirts.
There were people in Boston who were working on debt issues, so we could buy into something that's under way. Community colleges are more expensive now, they cost as much as private colleges used to. Parents are also affected; if their kids can't support themselves, then the parents have to subsidize them.
StrikeDebt tried to get 1MM people to pledge to a debt strike; if a million people sign, then no one repays. They considered this campaign a failure; only around 10,000 signed the pledge.
You could frame the question as "how old will you be when you finish paying your student loans".
Should we have a mailing list for this group? (Agreement, we should have a mailing list). Steve will set one up.
During our next meeting, let's work on planning the debt movement. We'll meet on Jan 14th.