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Forum Post: From OccupyNews to DebtNEUTRALITY.

Posted 5 years ago on Aug. 11, 2012, 2:44 a.m. EST by DebtNEUTRALITY (23)
This content is user submitted and not an official statement

I think http://www.occupynews.blogspot.com is an amazing tool for the 175 occupy groups to keep tabs on each other, instantly, via the 175 Occupy RSS feeds.

The blog can self run since the RSS feeds automatically update as Occupy groups from around the country and world update their blogs with new stories.

I am going to refocus my attention on Debt NEUTRALITY. http://www.debtneutraity.blogspot.com

There is only so much good that can come from exposing the badness of bad people.

I feel there is more good that can be generated by promoting methods that cut off the wall street octopus tentacles from our lives.

3 trillion dollars in credit card and student loan debt in the U.S. results in 1 billion dollars a day in interest rate payments to starving bankers on wall street.

Do I really care if a wall street banker goes on trial and to jail if I ignore ways to IMMEDIATELY help people in my own community? The answer is, I really don't care about punishing THEM as much as I care about helping US.

I'm going to focus on what I think is a powerful solution to cutting off one of the Wall Street tentacles, consumer debt, via the concept of Debt Neutrality.

Debt Neutrality promotes no more interest rate charges, penalties or fees on credit card and student loan debt. Eventually, Debt Neutrality could be applied to countries as well. Nations can't all be in debt to each other, it's a mathematical impossibility, rather they are in debt to a small group of super rich elite who can't stop themselves from making more and more money no matter who they harm.

But first things first, lets get Debt Neutrality momentum going in the U.S. What I like about Debt Neutrality is that there is no debt forgiveness in it so it neutralizes republican banter about liberal handouts. I also like that because someone stills pays back their debt, they don't have to apologize to anybody about anything.

Some people don't seem to realize that Interest rate charges on most purchased items can double or triple the cost of the product by the time the final payment is made. Others will never get out of "debt rent" specifically because of the interest rate charges.

As consumer debt drops because of Debt Neutrality, more money can be spent locally developing regional gadgetry involving the creation of energy generation products on a very localized level. An inventor located in a windy part of the country may invent a handy way to generate backyard wind energy, but someone one state over might have a way to use global warming to at least generate natural energy from it.

These local inventors can be funded by ourselves as the one billion dollars a day interest rate charges that is presently going to the starving bankers is instead rerouted by the will of what people want to do and invest in as their consumer debt burden lowers.

Please consider signing the debt neutrality petition... http://www.change.org/petitions/congress-create-debt-neutrality-rights-for-paying-down-credit-cards-student-loans



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[-] 1 points by kaiserw (211) 5 years ago

Steve Keen, an Aussie, has proposed a similar action - Do a QE for the people with the restriction that the money must be spent to reduce debt first. I think it's a great idea. If it could actually be implemented, and unfortunately the 2nd order effect would be immediate hyperinflation, but we're going to get that anyway. We might as well get on with it and move on like Iceland. Iceland is doing fine now BTW.

[-] 1 points by DebtNEUTRALITY (23) 5 years ago

The reason why I don't think there will be any kind of a backlash is that it will still take years to pay down consumer debt. Lets say for sake of an example that right now, 50% of the consumer's payment goes towards interest rate payment every month, and the other 50% goes towards the principle.

Now we've removed the interest rate charge. So what happens next, does the consumer pay 1/2 towards their debt, which now lowers, and keep the other half for spending? I think that would be ideal.

However, some may want to make the same level of payment, 2% of the minimum, but then have a bit left over as respend money.

No matter how it is cut, 50% will go probably go towards lowering the overall debt, and the other 50% will go towards paying for stuff cash instead of on credit.

Since the consumer is still buying the same amount of stuff, but now it is not on credit, there may not be hyper inflation. 1% of what is owed every month, assuming that payment remains constant even after the debt begins to drop, means 100 payments to pay off the debt. That is still 8 years and 4 months to pay down and pay off their debt.

Ironically, the banks won't be hurt because they ultimately still get to keep the same amount of the payment as before, except instead of going towards never ending interest, it goes to pay off the actual debt.

8 years from now the banks can cry, but by then, if the economy is working well, it won't really matter.

[-] 1 points by kaiserw (211) 5 years ago

Based on academic work producing the book "This time is Different" by Ken Rogoff and Carmen Reinhart, where we are in the debt cycle is untenable. In normal (non-crisis) periods, it takes on average 20 years to work out of a debt cycle (where we are) assuming financial repression (artificially and extremely low interest rates and moderate inflation rates.

The problem is that the amount of debt that is out there world wide is absolutely insane, and for the first time in history, it's coming due all at the same time. To save Europe, would require more money than the entire world generates for GDP. Japan is in a similar situation. The US has played with their books for a long time, and we're in a similar situation to Greece, except, due to the size of the US, we'd need intergalactic bailouts. To get out of this would be comparable to flying a 747 at mach 3 through an eye of a needle. Some sort of crash will certainly result.

Because of the bias in the US to maintain the banking system and avoid outright default on commitments to entitlement programs, they're trying to conduct financial repression - essentially zero interest rates, and 4-6% inflation rates to work it off. The problem is inflation isn't just a central bank controlled measure, it's like trying to push an oil tanker over a waterfall at a constant speed. Inflation is money supply and velocity. Money supply is being forced on the fed to maintain the banking system - it has to keep growing, or the system collapses. Velocity is a social phenomenon based on trust of the holders of the currency. Everybody is starting to freak out. The dollar is doing well now because everybody is focused on Europe now, but Japan is about to detonate too (think months). Confidence is eroding, and is on the road so often taken in history, velocity, will eventually catch up with money supply, then global Weimar...

Peter Bernholz, a Swiss wrote another excellent book on hyperinflations, and interstingly, all but (i think) 2 were in the 20th century. It's a modern problem, and he empirically goes through each case that has happened in history. It doesn't look good. Is it possible we could get out of this with a 20 year malaise, yes, possible but extremely unlikely. It's far more likely, that we will end up in default, devaluation or very high inflation, that leads to the 2 prior, or currency collapse, and reissue.

I've studied this alot, for several years, and I'm only scratching the surface, but there's not likely a good way out given the situation the world is in right now. In many ways, it would likely be better to have a currency collapse. The big banks would go out of business, and hopefully the corrupt networks would be starved long enough to suffer a die-off. However the human cost will be high as well.

[-] 1 points by DebtNEUTRALITY (23) 5 years ago

But the entire world cannot be in debt to each other, otherwise the debts cancel and things are not that bad. What we have are obscenely wealthy individuals or sub entities within countries who are the debt holders.

Why is the propaganda about oh no, the world is debt to each other not replaced with, there are a few very wealth entities in the world who need to give the world, a break, and that is not a pretty please question.

[-] 1 points by kaiserw (211) 5 years ago

Yes, it's the Wiley Coyote moment. The system has been built upon an illusion of getting a free lunch. It's not a matter of these entities giving anyone a break, without consequences. That is false. If these companies write off the debt (government intervention, or whatever) the counterparties are so intertwined, the entire system collapses. If government prints the money to make the debtors whole and let them off the hook, hyperinflation is the likely result (much more quickly). The banks, the government, and everyone in power sees the positioning on the board, and they're trying to prevent the collapse.

Unfortunately, there is no preventing it, it's coming, either sooner (bad), or later (worse). If governments and business were honest, they would default, negotiate with the creditors to pay 2c on the dollar, of all the obligations that they have, and the same should happen with private individuals - an easy way to default on debts without becoming destitute. Unfortunately, legislation has changed the rules of the game in the favor of the banks, not the people (bankruptcy laws). A modern day debt jubilee would be a prudent decision.

The politicians are trying to goose the system further with more money printing and greater debt expansion to keep things from collapsing. History is clear on this point, that it makes the problems much worse. Hyperinflation is devastating to normal people, savers, pensioners, etc.

The only way to fix the problem is to prevent the originating credit expansion, and unless someone invents a time machine soon, we're F#@#ed... Sorry.

The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved. - Ludwig Von Mises

[-] 1 points by DebtNEUTRALITYpetition (647) 5 years ago

I never said debt forgiveness, but rather debt neutrality, where future interest payments, penalties and fees are waived. The debt holder still gets the profit already made, eventually the rest of their money back, and a HEALTHIER ECONOMY which actually adds value to their existing porrfolio.