[candybar]

> everyone gets the same nominal payout, debtors must use the payout to pay off debt

I'm generally supportive of these types of measures especially in a financial crisis, but keep in mind that economically, this isn't too different from a bank bailout. The primary net effect of giving people money to pay off their loans is making lenders whole.

[PeterisP]

> The primary net effect of giving people money to pay off their loans is making lenders whole.

Well no, that's the net effect if you give insolvent people money to pay their loans; but if you erase the debt of people who would keep on paying that money for decades, then this has the immediate impact of freeing up a big part of their next paycheck - which otherwise would go to that loan payment - to be spent or invested elsewhere, and this doesn't happen if you just make a bank bailout.

[candybar]

Banks don't know which of their borrowers are insolvent - in a credit crisis, the problem isn't merely that the banks aren't paid what they are owed, but that there's a systematic increase in the perceived default risk of their borrowers on average. Giving money to everyone substantially lessens the overall risk of their loan portfolio. This encourages, of course, more lending.

The rest of what you're talking about is fairly standard economic stimulus and it's not that controversial or unprecedented and has little to do with debt jubilee.

I'm not necessarily against any of this - the point is more that the mechanism proposed (giving money to everyone with the intent of helping people pay off their loans) does not match the rhetoric (GP decrying too much debt and socialism for the rich).