Iceland Leads The Way
April 15, 2012 in Finance
The call for complete forgiveness of debt, what some would call a jubilee, has resounded through our society over the past several months.
I started writing about it last fall.
At the time, I received comments from many people who agreed that the forgiveness of debt may be the only thing that allows our world to experience a full economic recovery.
According to recent stories, Iceland has done exactly that. The reports vary on the reach of this debt forgiveness.
This YouTube video claims it was nationwide forgiveness of mortgage debt.
This more conservative story from Bloomberg states it was just for those whose mortgages were more than the value of their homes.
Whatever the actual story is, it is apparent that Iceland is taking bold steps in relieving the debt load of its people.
Central banks are taking notice.
The International Monetary Fund agrees that this is a good fiscal practice to restore growth.
In the United States, Fannie Mae and Freddie Mac are debating the technique and are close to implementing it.
Some are complaining that debt forgiveness wouldn’t be fair to those who have worked hard, managed their finances, and paid their debt without help. I understand this argument. I am all for personal responsibility and, as a rule; I think entitlements hurt productivity and discourage personal growth.
Others say debt forgiveness is tit-for-tat because the banks’ debts were paid by taxpayers in 2008. It is only fair that taxpayers get financial relief too. In addition, the banks practice of creating money out of thin air is not fair. Rather than provide value for value, this practice causes inflation and produces debt slavery.
I see this point too. However, correction is not about revenge. It is about correction. It is about doing something in a manner that accomplishes our stated goal.
So, what is our goal?
As far as I can tell, it is to create a fair economy for all; one in which every person on our planet thrives.
This is what happened when people took responsibility, managed their finances, and paid their mortgages. They thrived financially. They mastered the financial lessons. Those people are to be commended.
However, most have not yet mastered this skill because the current banking system makes it virtually impossible to do so. This system is rigged to oppose the reduction of debt. As a result, our entire society suffers.
We would relieve this suffering through debt forgiveness. Moreover, the financial reverberations of such an audacious move will spur an economic boom as funds that were previously used to service debt are freed up to feed other parts of the economy.
Debt forgiveness would allow for this. It would balance the scales.
Iceland has set the pace.
The central banks are considering it.
Those who oppose it are doing so because they have proudly mastered financial lessons and they think others should do so too.
Maybe it is time for them to learn a new lesson.
It is the lesson of forgiveness.
