Matt Yglesias likes the Rolling Jubilee but still isn’t sure if it passes the “is this a better idea than cash transfers to the poor?” test. Which is a good test! But I think this particular idea does past that test, for one reason: leverage.
If I’m poor and I owe $100, that debt may get sold for $15 to a collector who will hound me to the grave for$30, $40, $50. So a cash transfer to me that eliminates that debt has to be in the $30-50 range. But if Occupy purchases the debt for the $15 and then tears it up, they have accomplished the same thing for cheaper. Both scenarios have the same financial impact on me (debt goes away) but Occupy’s Rolling Jubilee accomplishes it with less money. Ergo, the same amount of money can have more impact – leverage!
As to whether the heavily indebted are more worthy of assistance – maybe, maybe not. But as a heuristic they are certainly more likely to be in need of assistance. And the faster folks can deleverage the faster they can return to the kind of consumer spending that will create jobs for poor people.
It would also be rather poetic if an inverted form of the same financial tactic that got us into this mess helped us also get out of it.