Barry Herman, Guest Blogger
As of 2:00 pm on Friday, November 16, 2012, individual Americans have contributed over $290,000 to an Occupy project called “Strike Debt” that will cancel $5.8 million of defaulted debt owed by US residents to hospitals and doctors in this country, and the amount donated is still growing.
This sentence must make little sense to readers outside the United States, so let me explain.
First, medical debt: in this country, many people have medical insurance through their employers or buy it individually. If they are over 65, they have it through a federal government program called Medicare, or if they are poor through a joint federal and state program called Medicaid. Some insurance, however, covers only part of the cost of medical care or it excludes some illnesses (for example, if you have a “pre-existing” condition when you start the insurance, it may not be covered), and some 44 million Americans have no insurance at all. The situation will be improved—if only partly— after the start of “Obamacare,” the medical insurance reform that the Obama Administration managed to get through the US Congress in 2010 (formally, the Patient Protection and Affordable Care Act). In the meantime, millions of Americans owe large amounts of money to hospitals and doctors. Anyone coming to a hospital in the United States has to be treated, whether they have insurance or not, but hospitals have a rather mixed record when it comes to getting paid by those who are not insured. Medical bills are a main reason for personal bankruptcy in this country.
Second, uncollected debt: when a person defaults on his medical debt (or credit card or other bank debt), the hospital or medical practice tries to recover through at first polite and then increasingly hostile letters to the ex-patient. If they cannot extract an agreement to pay, they will sell the patient’s obligation to a private collection agency. The collection agency will pay pennies on the dollar, so that if it collects on a small fraction of the claims it now owns, it will profit.
Third, Strike Debt: a group of folks from Occupy Wall Street in New York City have been studying personal and municipal debt problems since the spring. It began meeting in the spring of 2012 and through the summer, mostly in public spaces, especially Washington Square Park in Manhattan but also in New York’s outer boroughs. It turns out that Strike Debt members are masters at locating disgruntled expertise in the financial sector.
Fourth: Rolling Jubilee: Strike Debt discovered the secondary market in defaulted personal debt and conceived the idea that they could buy packages of the debt and simply tear it up. Before making the purchase, one does not know whose debt one is buying, but subsequently, the phone number, last known address and other identifying information for the debtor are disclosed to the collector. The Strike Debt members, which include debtors hiding from their creditors, knew it wouldn’t be easy to locate the debtors lucky enough to have their debt cancelled, but they would try. They hoped that publicity around the campaign, which has increasingly been covered in the mainstream media, would alert some debtors that the call they would receive was not a crank call: “Hello, this is Occupy Wall Street; we just cancelled your medical debt.” Strike Debt named the project “Rolling Jubilee” in reference to the biblical and Babylonian Jubilees when debt was forgiven and slaves freed. Not all debt enters this market; for example, it does not include mortgage debt (the home is the collateral for the debt and the bank takes possession). But canceling medical debt, a widespread issue in the United States, sends a strong statement.
The Message: when I mention Rolling Jubilee to friends outside Occupy, they laugh and say, “That’s great!” Why? It says something about how creditors dehumanize defaulting debtors, as if to say, “They are only worth pennies on the dollar.” And now Strike Debt has figured out “We can use that.”
I think the political message of Rolling Jubilee is a good one. Although it looks like a practice used to cancel sovereign debts of poor countries, I do not think it is meant as a specific policy strategy. I think we should see Rolling Jubilee in the way that Occupy sees it, challenging the legitimacy of callous institutions and systems that favor the powerful. It raises public consciousness and opens a public conversation. I see Rolling Jubilee as similar to setting up tents outside Wall Street banks. That was not going to end capitalism any more than the mass effort to levitate the Pentagon in 1967 led by Abbie Hoffman was going to end the Vietnam War. But I think Rolling Jubilee can change the national conversation about personal indebtedness, how people fall into it and how they need to be helped out of excessive amounts of it. Occupy changed the political debate in the United States with a simple phrase, “We are the 99%.” Possibly they can do it again with the Rolling Jubilee.
If readers would like to follow the Rolling Jubilee campaign (or contribute), you can do so at http://rollingjubilee.org/.
Barry Herman (Ph.D., University of Michigan) is Visiting Senior Fellow at the Graduate Program in International Affairs of The New School in New York. He is also a member of the Advisory Board of Social Justice in Global Development, an international NGO registered in Germany that promotes reform of global development policies and improved global economic governance (www.socdevjustice.org)
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