What is a Debt Jubilee?

Executive Summary

• Debt jubilees are ways of mitigating the feature of the debt overhang and undermining society.

Introduction

A debt jubilee is an ancient practice that goes back to Sumeria where some debts — debts to the palace or government were canceled, normally upon the death of a king or upon losing a war. Debt jubilees were performed to keep the civilians from being enslaved to their debtors, which would mean the state would lose those individuals from fighting in the military. This is explained by Michael Hudson as follows..

“There are numerous ways of handling it. The Germans handled it by paying about 80% of people’s income to them when they’re not at work or when they can’t go to work. The way that ancient society handled it was very simple. You’d have a moratorium on all ends of the financial process: a moratorium on rent, a moratorium on debt service, and a moratorium on what the banks – right down the line – what the banks had to do. This is what was literally written into the original document, called the act of God Clause, and that was in Hammurabi’s laws in 1750 BC. Hammurabi said that if there is a flood, or a drought, or a disease, the rents didn’t have to be paid, the taxes didn’t have to be paid; there was a tax holiday and they were canceled out. Otherwise, you’d have people losing their land, and all the land and homesteads would have been concentrated in the hands of a few wealthy creditors.” – Michael Hudson

Source: Michael Hudson

https://michael-hudson.com/2020/12/jubillee-perspectives-with-steve-keen/