Debt relief
Encyclopedia
Debt relief is the partial or total forgiveness of debt
, or the slowing or stopping of debt growth, owed by individuals, corporations, or nations. From antiquity through the 19th century, it refers to domestic debts, in particular agricultural debts and freeing of debt slaves. In the late 20th century, it came to refer primarily to Third World debt, which started exploding with the Latin American debt crisis
(Mexico 1982, etc.). In the early 21st century, it is of increased applicability to individuals in developed countries, due to credit bubbles and housing bubbles.
, which substantially reduced German's war reparations
, is a notable example of international debt relief. Part of the reasoning was that German's World War I reparations
were deeply resented in Germany, and credited internationally as a cause of World War II
, and thus debt relief helped reconciliation and peace in Europe.
developing countries
was the subject in the 1990s of a campaign by a broad coalition of development NGOs
, Christian organizations and others, under the banner of Jubilee 2000
. This campaign, involving, for example, demonstrations at the 1998 G8
meeting in Birmingham
, was successful in pushing debt relief onto the agenda of Western governments and international organizations such as the International Monetary Fund
and World Bank
. The Heavily Indebted Poor Countries
(HIPC) initiative was ultimately launched to provide systematic debt relief for the poorest countries, whilst trying to ensure the money would be spent on poverty reduction
.
The HIPC programme has been subject to conditionalities similar to those often attached to International Monetary Fund
(IMF) and World Bank loans, requiring structural adjustment
reforms, sometimes including the privatisation
of public utilities, including water and electricity. To qualify for irrevocable debt relief, countries must also maintain macroeconomic stability and implement a Poverty Reduction Strategy satisfactorily for at least one year. Under the goal of reducing inflation, some countries have been pressured to reduce spending in the health and education sectors.
The Multilateral Debt Relief Initiative (MDRI) is an extension of HIPC. The MDRI was agreed following the G8
's Gleneagles meeting
in July 2005. It offers 100% cancellation of multilateral debts owed by HIPC countries to the World Bank
, IMF and African Development Bank
.
. They argue that the money would be far better spent in specific aid projects that actually help the poor. They further argue that it would be unfair to third-world countries that managed their credit successfully, or do not go into debt in the first place. That is, it actively encourages third-world governments to overspend in order to receive debt relief in the future.
Others argue against the conditionalities attached to debt relief. These conditions of structural adjustment
have a history, especially in Latin America, of widening the gap between the rich and the poor, as well as increasing economic dependence on the global North.
There are many companies who offer debt consolidation
services. However, such services may not always be in the best interests of the person involved and may involve taking out a loan secured by a person's home. Marketing materials are designed to persuade customers to take up the company's offer rather than offering a personal best solution for reducing debt. Where debt has become a problem, it is often best to turn to an independent consumer's association for advice before calling debt consolidation companies as consumer's associations often have great experience with such problems and may be able to advise the most effective avenues for debt relief- for the price.
As long as some form of Chapter 7 bankruptcy debt relief exists within American law, the credit card companies must pay attention, and do as much as they can to help their clients repay debts through relatively traditional means (depending upon the service those clients have entered). Even leaving bankruptcy aside, it is in the best interest of credit card companies that their debtors at least feel some motivation to continue repaying their accounts and not simply disappear or view those ever growing balances as untouchable.
. In the context of the bursting of the United States housing bubble
, the Mortgage Forgiveness Debt Relief Act of 2007
provides that debt forgiven on a primary residence is not treated as income, for debts forgiven in the 3-year period 2007–2009. The Emergency Economic Stabilization Act of 2008
extended this by 3 years to the 6-year period 2007–2012.
, where a debtor who cannot or chooses not to pay their debts files for bankruptcy and renegotiates their debts, or a creditor initiates this. As part of debt restructuring
, the terms of the debt are modified, which may involve the debt owed being reduced. In case the debtor chooses bankruptcy despite being able to service the debt, this is called strategic bankruptcy
.
Certain debts can be defaulted on without a general bankruptcy; these are non-recourse loans, most notably mortgages in common law jurisdictions such as the United States
. Choosing to default on such a loan despite being able to service it is called strategic default
.
If a debt cannot be or is not repaid, alternatives that were common historically but are now rare include debt bondage
– including debt peonage: being bound until the debt is repaid; and debt slavery, when the debt is so great (or labor valued so low) that the debt will never be repaid – and debtors' prison.
Debt slavery can persist across generations, future generations being made to work to pay off debts incurred by past generations. Debt bondage is today considered a form of "modern day slavery
" in international law, and banned as such, in Article 1(a) of the United Nations 1956 Supplementary Convention on the Abolition of Slavery
. Nevertheless, the practice continues in some nations. In most developed nations, debts cannot be inherited.
Debtors' prison has been largely abolished, but remains in some forms in the US, for example if one fails to make child support
payments.
and debt restructuring
. Forbearance meaning that interest payments (possibly including past due ones) are forgiven, so long as payments resume. No reduction of principal occurs, however.
In debt restructuring, an existing debt is replaced with a new debt. This may result in reduction of the principal (debt relief), or may simply change the terms of repayment, for instance by extending the term (replacing a debt repaid over 5 years with one repaid over 10 years), which allows the same principal to be amortized over a longer period, thus allowing smaller payments.
Personal debt that can be repaid from income but is not being repaid may be obtained via garnishment
or attachment of earnings
, which deduct debt service from wages.
- the reduction in the nominal value of currency - reduces the real value of debts. While lenders take inflation into account when they decide the terms of a loan, unexpected increases in the rate of inflation cause categorical debt relief.
Inflation has been a contentious political issue on this basis, with debasement
of currency a form of or alternative to sovereign default
, and the free silver
in late 19th century America being seen as a conflict between debtor farmers and creditor bankers.
by William Shakespeare
, c. 1598, the heroine pleads for debt relief (forgiveness) on grounds of Christian mercy
. In the 1900 novel The Wonderful Wizard of Oz
, a primary political interpretation
is that it treats free silver
, which engenders inflation
and hence reduces debts. In the 1999 film Fight Club
(but not the novel on which it is based
), the climactic event is the destruction of credit card records – dramatized as the destruction of skyscrapers – effecting debt relief.
Debt
A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...
, or the slowing or stopping of debt growth, owed by individuals, corporations, or nations. From antiquity through the 19th century, it refers to domestic debts, in particular agricultural debts and freeing of debt slaves. In the late 20th century, it came to refer primarily to Third World debt, which started exploding with the Latin American debt crisis
Latin American debt crisis
The Latin American debt crisis was a financial crisis that occurred in the early 1980s , often known as the "lost decade", when Latin American countries reached a point where their foreign debt exceeded their earning power and they were not able to repay it.-Origins:In the 1960s and 1970s many...
(Mexico 1982, etc.). In the early 21st century, it is of increased applicability to individuals in developed countries, due to credit bubbles and housing bubbles.
War reparations
In the mid-20th century, the 1953 Agreement on German External DebtsAgreement on German External Debts
London Agreement on German External Debts, also known as the London Debt Agreement, was a debt relief treaty between the Federal Republic of Germany on one part and on Belgium, Canada, Ceylon, Denmark, the French Republic, Greece, Iran, Ireland, Italy, Liechtenstein, Luxembourg, Norway, Pakistan,...
, which substantially reduced German's war reparations
War reparations
War reparations are payments intended to cover damage or injury during a war. Generally, the term war reparations refers to money or goods changing hands, rather than such property transfers as the annexation of land.- History :...
, is a notable example of international debt relief. Part of the reasoning was that German's World War I reparations
World War I reparations
World War I reparations refers to the payments and transfers of property and equipment that Germany was forced to make under the Treaty of Versailles following its defeat during World War I...
were deeply resented in Germany, and credited internationally as a cause of World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, and thus debt relief helped reconciliation and peace in Europe.
Third world debt
Debt relief for heavily indebted and underdevelopedUnderdevelopment
Underdevelopment is a term often used to refer to economic underdevelopment, symptoms of which include lack of access to job opportunities, health care, drinkable water, food, education and housing...
developing countries
Developing country
A developing country, also known as a less-developed country, is a nation with a low level of material well-being. Since no single definition of the term developing country is recognized internationally, the levels of development may vary widely within so-called developing countries...
was the subject in the 1990s of a campaign by a broad coalition of development NGOs
Non-governmental organization
A non-governmental organization is a legally constituted organization created by natural or legal persons that operates independently from any government. The term originated from the United Nations , and is normally used to refer to organizations that do not form part of the government and are...
, Christian organizations and others, under the banner of Jubilee 2000
Jubilee 2000
Jubilee 2000 was an international coalition movement in over 40 countries that called for cancellation of third world debt by the year 2000. This movement coincided with the Great Jubilee, the celebration of the year 2000 in the Catholic Church...
. This campaign, involving, for example, demonstrations at the 1998 G8
G8
The Group of Eight is a forum, created by France in 1975, for the governments of seven major economies: Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. In 1997, the group added Russia, thus becoming the G8...
meeting in Birmingham
Birmingham
Birmingham is a city and metropolitan borough in the West Midlands of England. It is the most populous British city outside the capital London, with a population of 1,036,900 , and lies at the heart of the West Midlands conurbation, the second most populous urban area in the United Kingdom with a...
, was successful in pushing debt relief onto the agenda of Western governments and international organizations such as the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
and World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
. The Heavily Indebted Poor Countries
Heavily Indebted Poor Countries
Heavily Indebted Poor Countries is a group of 40 developing countries with high levels of poverty and debt overhang which are eligible for special assistance from the International Monetary Fund and the World Bank.- History and structure :...
(HIPC) initiative was ultimately launched to provide systematic debt relief for the poorest countries, whilst trying to ensure the money would be spent on poverty reduction
Poverty reduction
Poverty is the state of human beings who are poor. That is, they have little or no material means of surviving—little or no food, shelter, clothes, healthcare, education, and other physical means of living and improving one's life....
.
The HIPC programme has been subject to conditionalities similar to those often attached to International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
(IMF) and World Bank loans, requiring structural adjustment
Structural adjustment
Structural adjustments are the policies implemented by the International Monetary Fund and the World Bank in developing countries. These policy changes are conditions for getting new loans from the International Monetary Fund or World Bank, or for obtaining lower interest rates on existing loans...
reforms, sometimes including the privatisation
Privatization
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...
of public utilities, including water and electricity. To qualify for irrevocable debt relief, countries must also maintain macroeconomic stability and implement a Poverty Reduction Strategy satisfactorily for at least one year. Under the goal of reducing inflation, some countries have been pressured to reduce spending in the health and education sectors.
The Multilateral Debt Relief Initiative (MDRI) is an extension of HIPC. The MDRI was agreed following the G8
G8
The Group of Eight is a forum, created by France in 1975, for the governments of seven major economies: Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. In 1997, the group added Russia, thus becoming the G8...
's Gleneagles meeting
31st G8 summit
The 31st G8 summit was held from July 6 to July 8, 2005 at the Gleneagles Hotel in Auchterarder, Scotland, United Kingdom and hosted by British Prime Minister Tony Blair...
in July 2005. It offers 100% cancellation of multilateral debts owed by HIPC countries to the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
, IMF and African Development Bank
African Development Bank
The African Development Bank Group is a development bank established in 1964 with the intention of promoting economic and social development in Africa...
.
Arguments against debt relief
Opponents of debt relief argue that it is a blank cheque to governments, and fear savings will not reach the poor in countries plagued by corruption. Others argue that countries will go out and contract further debts, under the belief that these debts will also be forgiven in some future date. They use the money to enhance the wealth and spending ability of the rich, many of whom will spend or invest this money in the rich countries, thus not even creating a trickle-down effectTrickle-down effect
The trickle-down effect is a marketing phenomenon that affects many consumer goods. Initially a product may be so expensive that only the wealthy can afford it...
. They argue that the money would be far better spent in specific aid projects that actually help the poor. They further argue that it would be unfair to third-world countries that managed their credit successfully, or do not go into debt in the first place. That is, it actively encourages third-world governments to overspend in order to receive debt relief in the future.
Others argue against the conditionalities attached to debt relief. These conditions of structural adjustment
Structural adjustment
Structural adjustments are the policies implemented by the International Monetary Fund and the World Bank in developing countries. These policy changes are conditions for getting new loans from the International Monetary Fund or World Bank, or for obtaining lower interest rates on existing loans...
have a history, especially in Latin America, of widening the gap between the rich and the poor, as well as increasing economic dependence on the global North.
Origins
Debt relief existed in a number of ancient societies:- Debt forgiveness is mentioned in the Book of Leviticus, in which God councils MosesMosesMoses was, according to the Hebrew Bible and Qur'an, a religious leader, lawgiver and prophet, to whom the authorship of the Torah is traditionally attributed...
to forgive debts in certain cases every Jubilee yearJubilee (Biblical)The Jubilee year is the year at the end of seven cycles of Sabbatical years , and according to Biblical regulations had a special impact on the ownership and management of land in the territory of the kingdoms of Israel and of Judah; there is some debate whether it was the 49th year The Jubilee...
– at the end of Shmita, the last year of the seven year agricultural cycle or a 49-year cycle, depending on interpretation. - This same theme was found in an ancient bilingual HittiteHittite languageHittite is the extinct language once spoken by the Hittites, a people who created an empire centred on Hattusa in north-central Anatolia...
-HurrianHurrian languageHurrian is a conventional name for the language of the Hurrians , a people who entered northern Mesopotamia around 2300 BC and had mostly vanished by 1000 BC. Hurrian was the language of the Mitanni kingdom in northern Mesopotamia, and was likely spoken at least initially in Hurrian settlements in...
text entitled "The Song of Debt Release". - Debt forgiveness was also found in Ancient Athens, where in the 6th century BCE, the lawmaker SolonSolonSolon was an Athenian statesman, lawmaker, and poet. He is remembered particularly for his efforts to legislate against political, economic and moral decline in archaic Athens...
instituted a set of laws called seisachtheiaSeisachtheiaSeisachtheia was a set of laws instituted by the Athenian lawmaker Solon in order to rectify the widespread serfdom and slaves that had run rampant in Athens by the 6th century BC, by debit relief...
, which canceled all debts and retroactively canceled previous debts that had caused slavery and serfdom, freeing debt slaves and debt serfs. - In addition, the Qur'anQur'anThe Quran , also transliterated Qur'an, Koran, Alcoran, Qur’ān, Coran, Kuran, and al-Qur’ān, is the central religious text of Islam, which Muslims consider the verbatim word of God . It is regarded widely as the finest piece of literature in the Arabic language...
(the MuslimMuslimA Muslim, also spelled Moslem, is an adherent of Islam, a monotheistic, Abrahamic religion based on the Quran, which Muslims consider the verbatim word of God as revealed to prophet Muhammad. "Muslim" is the Arabic term for "submitter" .Muslims believe that God is one and incomparable...
scripture) supports debt forgiveness unable to pay as an act of charity and remission of sins for the creditor. The injunction is as follows:
Contemporary
Personal debt has become an increasingly large problem in many developed countries in recent years, due to credit bubbles. For instance, it is estimated that the average US household has $19,000 in non-mortgage debt. With such large debt loads, many individuals have difficulty making repayments on debts and are in need of help.There are many companies who offer debt consolidation
Debt consolidation
Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan....
services. However, such services may not always be in the best interests of the person involved and may involve taking out a loan secured by a person's home. Marketing materials are designed to persuade customers to take up the company's offer rather than offering a personal best solution for reducing debt. Where debt has become a problem, it is often best to turn to an independent consumer's association for advice before calling debt consolidation companies as consumer's associations often have great experience with such problems and may be able to advise the most effective avenues for debt relief- for the price.
As long as some form of Chapter 7 bankruptcy debt relief exists within American law, the credit card companies must pay attention, and do as much as they can to help their clients repay debts through relatively traditional means (depending upon the service those clients have entered). Even leaving bankruptcy aside, it is in the best interest of credit card companies that their debtors at least feel some motivation to continue repaying their accounts and not simply disappear or view those ever growing balances as untouchable.
Tax treatment
In US tax law, debt forgiven is treated as income, as it reduces a liability, increasing the taxpayer's net worthNet worth
In business, net worth is the total assets minus total outside liabilities of an individual or a company. For a company, this is called shareholders' preference and may be referred to as book value. Net worth is stated as at a particular year in time...
. In the context of the bursting of the United States housing bubble
United States housing bubble
The United States housing bubble is an economic bubble affecting many parts of the United States housing market in over half of American states. Housing prices peaked in early 2006, started to decline in 2006 and 2007, and may not yet have hit bottom as of 2011. On December 30, 2008 the...
, the Mortgage Forgiveness Debt Relief Act of 2007
Mortgage Forgiveness Debt Relief Act of 2007
The Mortgage Forgiveness Debt Relief Act was introduced in Congress on September 25, 2007, and became law on December 20, 2007. This act offered relief to homeowners who would formerly owe taxes on forgiven mortgage debt after facing foreclosure. The act extends such relief for three years,...
provides that debt forgiven on a primary residence is not treated as income, for debts forgiven in the 3-year period 2007–2009. The Emergency Economic Stabilization Act of 2008
Emergency Economic Stabilization Act of 2008
The Emergency Economic Stabilization Act of 2008 The Emergency Economic Stabilization Act of 2008 The Emergency Economic Stabilization Act of 2008 (Division A of , commonly referred to as a bailout of the U.S. financial system, is a law enacted in response to the subprime mortgage crisis...
extended this by 3 years to the 6-year period 2007–2012.
Bankruptcy and non-recourse loans
The primary mechanism of debt relief in modern societies is bankruptcyBankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
, where a debtor who cannot or chooses not to pay their debts files for bankruptcy and renegotiates their debts, or a creditor initiates this. As part of debt restructuring
Debt restructuring
Debt restructuring is a process that allows a private or public company – or a sovereign entity – facing cash flow problems and financial distress, to reduce and renegotiate its delinquent debts in order to improve or restore liquidity and rehabilitate so that it can continue its...
, the terms of the debt are modified, which may involve the debt owed being reduced. In case the debtor chooses bankruptcy despite being able to service the debt, this is called strategic bankruptcy
Strategic bankruptcy
A strategic bankruptcy may occur when an otherwise solvent company makes use of the bankruptcy laws for some specific business purpose. For example, in 2002 Kmart filed chapter 11 for protection from creditors; however one of the main problems affecting Kmart's cash flow and therefore liquidity...
.
Certain debts can be defaulted on without a general bankruptcy; these are non-recourse loans, most notably mortgages in common law jurisdictions such as the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. Choosing to default on such a loan despite being able to service it is called strategic default
Strategic default
A strategic default is the decision by a borrower to stop making payments on a debt despite having the financial ability to make the payments....
.
Historical
Debt bondage
Debt bondage is when a person pledges him or herself against a loan. In debt bondage, the services required to repay the debt may be undefined, and the services' duration may be undefined...
– including debt peonage: being bound until the debt is repaid; and debt slavery, when the debt is so great (or labor valued so low) that the debt will never be repaid – and debtors' prison.
Debt slavery can persist across generations, future generations being made to work to pay off debts incurred by past generations. Debt bondage is today considered a form of "modern day slavery
Slavery
Slavery is a system under which people are treated as property to be bought and sold, and are forced to work. Slaves can be held against their will from the time of their capture, purchase or birth, and deprived of the right to leave, to refuse to work, or to demand compensation...
" in international law, and banned as such, in Article 1(a) of the United Nations 1956 Supplementary Convention on the Abolition of Slavery
United Nations 1956 Supplementary Convention on the Abolition of Slavery
The full title of this treaty is: The United Nations 1956 Supplementary Convention on the Abolition of Slavery, the Slave Trade, and Institutions and Practices Similar to Slavery. A 1926 Slavery Convention proposed to secure the abolition of slavery and of the slave trade...
. Nevertheless, the practice continues in some nations. In most developed nations, debts cannot be inherited.
Debtors' prison has been largely abolished, but remains in some forms in the US, for example if one fails to make child support
Child support
In family law and public policy, child support is an ongoing, periodic payment made by a parent for the financial benefit of a child following the end of a marriage or other relationship...
payments.
Contemporary
In modern times, the most common alternatives to debt relief in cases where debt cannot be paid are forbearanceForbearance
In the context of a mortgage process, forbearance is a special agreement between the lender and the borrower to delay a foreclosure. The literal meaning of forbearance is “holding back.”...
and debt restructuring
Debt restructuring
Debt restructuring is a process that allows a private or public company – or a sovereign entity – facing cash flow problems and financial distress, to reduce and renegotiate its delinquent debts in order to improve or restore liquidity and rehabilitate so that it can continue its...
. Forbearance meaning that interest payments (possibly including past due ones) are forgiven, so long as payments resume. No reduction of principal occurs, however.
In debt restructuring, an existing debt is replaced with a new debt. This may result in reduction of the principal (debt relief), or may simply change the terms of repayment, for instance by extending the term (replacing a debt repaid over 5 years with one repaid over 10 years), which allows the same principal to be amortized over a longer period, thus allowing smaller payments.
Personal debt that can be repaid from income but is not being repaid may be obtained via garnishment
Garnishment
A garnishment is a means of collecting a monetary judgment against a defendant by ordering a third party to pay money, otherwise owed to the defendant, directly to the plaintiff...
or attachment of earnings
Attachment of earnings
Attachment of Earnings is a legal process in civil litigation by which a defendant's wages or other earnings are taken to pay for a debt. This collections process is used in the common law system, especially Britain and the United States, but in other legal regimes as well.Ballentine's Law...
, which deduct debt service from wages.
Inflation
InflationInflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
- the reduction in the nominal value of currency - reduces the real value of debts. While lenders take inflation into account when they decide the terms of a loan, unexpected increases in the rate of inflation cause categorical debt relief.
Inflation has been a contentious political issue on this basis, with debasement
Debasement
Debasement is the practice of lowering the value of currency. It is particularly used in connection with commodity money such as gold or silver coins...
of currency a form of or alternative to sovereign default
Sovereign default
A sovereign default is the failure or refusal of the government of a sovereign state to pay back its debt in full. It may be accompanied by a formal declaration of a government not to pay or only partially pay its debts , or the de facto cessation of due payments...
, and the free silver
Free Silver
Free Silver was an important United States political policy issue in the late 19th century and early 20th century. Its advocates were in favor of an inflationary monetary policy using the "free coinage of silver" as opposed to the less inflationary Gold Standard; its supporters were called...
in late 19th century America being seen as a conflict between debtor farmers and creditor bankers.
Debt relief in art
Debt relief plays a significant role in some artworks: in the play The Merchant of VeniceThe Merchant of Venice
The Merchant of Venice is a tragic comedy by William Shakespeare, believed to have been written between 1596 and 1598. Though classified as a comedy in the First Folio and sharing certain aspects with Shakespeare's other romantic comedies, the play is perhaps most remembered for its dramatic...
by William Shakespeare
William Shakespeare
William Shakespeare was an English poet and playwright, widely regarded as the greatest writer in the English language and the world's pre-eminent dramatist. He is often called England's national poet and the "Bard of Avon"...
, c. 1598, the heroine pleads for debt relief (forgiveness) on grounds of Christian mercy
Mercy
Mercy is broad term that refers to benevolence, forgiveness and kindness in a variety of ethical, religious, social and legal contexts.The concept of a "Merciful God" appears in various religions from Christianity to...
. In the 1900 novel The Wonderful Wizard of Oz
The Wonderful Wizard of Oz
The Wonderful Wizard of Oz is a children's novel written by L. Frank Baum and illustrated by W. W. Denslow. Originally published by the George M. Hill Company in Chicago on May 17, 1900, it has since been reprinted numerous times, most often under the name The Wizard of Oz, which is the name of...
, a primary political interpretation
Political interpretations of The Wonderful Wizard of Oz
Political interpretations of The Wonderful Wizard of Oz include treatments of the modern fairy tale as an allegory or metaphor for the political, economic and social events of America in the 1890s...
is that it treats free silver
Free Silver
Free Silver was an important United States political policy issue in the late 19th century and early 20th century. Its advocates were in favor of an inflationary monetary policy using the "free coinage of silver" as opposed to the less inflationary Gold Standard; its supporters were called...
, which engenders inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
and hence reduces debts. In the 1999 film Fight Club
Fight Club (film)
Fight Club is a 1999 American film based on the 1996 novel of the same name by Chuck Palahniuk. The film was directed by David Fincher and stars Edward Norton, Brad Pitt and Helena Bonham Carter. Norton plays the unnamed protagonist, an "everyman" who is discontented with his white-collar job...
(but not the novel on which it is based
Fight Club (novel)
Fight Club is a 1996 novel by Chuck Palahniuk. It follows the experiences of an unnamed protagonist struggling with insomnia. Inspired by his doctor's exasperated remark that insomnia is not suffering, he finds relief by impersonating a seriously ill person in several support groups...
), the climactic event is the destruction of credit card records – dramatized as the destruction of skyscrapers – effecting debt relief.
See also
- Agreement on German External DebtsAgreement on German External DebtsLondon Agreement on German External Debts, also known as the London Debt Agreement, was a debt relief treaty between the Federal Republic of Germany on one part and on Belgium, Canada, Ceylon, Denmark, the French Republic, Greece, Iran, Ireland, Italy, Liechtenstein, Luxembourg, Norway, Pakistan,...
- Anti-globalisation movementAnti-globalization movementThe anti-globalization movement, or counter-globalisation movement, is critical of the globalization of corporate capitalism. The movement is also commonly referred to as the global justice movement, alter-globalization movement, anti-globalist movement, anti-corporate globalization movement, or...
- ConditionalityConditionalityConditionality is a concept in international development, political economy and international relations and describes the use of conditions attached to a loan, debt relief, bilateral aid or membership of international organizations, typically by the international financial institutions, regional...
- Debt restructuringDebt restructuringDebt restructuring is a process that allows a private or public company – or a sovereign entity – facing cash flow problems and financial distress, to reduce and renegotiate its delinquent debts in order to improve or restore liquidity and rehabilitate so that it can continue its...
- International developmentInternational developmentInternational development or global development is a concept that lacks a universally accepted definition, but it is most used in a holistic and multi-disciplinary context of human development — the development of greater quality of life for humans...
- International Monetary FundInternational Monetary FundThe International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
| World BankWorld BankThe World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty... - Survie NGOSurvie NGOSurvie is a non-governmental organization founded in 1984 to fight hunger and corruption in the Third World. It has since became a federation of departmental associations, composed of 1,600 paying members, about a 100 activists and six employees...
activist group against Third World debt - Odious debtOdious debtIn international law, odious debt is a legal theory that holds that the national debt incurred by a regime for purposes that do not serve the best interests of the nation, should not be enforceable. Such debts are, thus, considered by this doctrine to be personal debts of the regime that incurred...
- Third World debt
- Jubilee USA Network
- EurodadEurodadEurodad is a network of 58 non-governmental organisations from 19 European countries. Eurodad and its members make up a network, this network researches and works on issues that are related to debt, development finance and poverty reduction.Recently this network has focussed on issues such as...