As the COVID-19 pandemic brought the global economy to a standstill in March 2020, a peculiar trend popped up in multiple cities: People started hanging white sheets out of their windows. With April rent coming due alongside record unemployment numbers, the white flags became a protest symbol for struggling tenants on the verge of a rent strike. The symbol spread online and eventually showed up in Chicago, Brooklyn, and New Orleans, according to reporting from CNN. The rent crisis also led to a rise in tenant unions, with tenants-turned-housing-activists in Oakland and San Francisco successfully organizing multi-month rent strikes that resulted in impressive wins. Despite the threat of eviction and potential economic and legal fallout, ordinary people, acting out of necessity, engaged in a collective act of defiance.
In ancient Mesopotamia, it was called a Jubilee. When debts at interest grew too high to be repaid, the slate was wiped clean. Debts were forgiven, the debtors’ prisons were opened, and the serfs returned to work their plots of land. This could be done because the king was the representative of the gods who were said to own the land, and thus was the creditor to whom the debts were owed. The same policy was advocated in the Book of Leviticus, though it is unclear to what extent this biblical Jubilee was implemented. That sort of across-the-board debt forgiveness can’t be done today because most of the creditors are private lenders. Banks, landlords and pension fund investors would go bankrupt if their contractual rights to repayment were simply wiped out.
President Biden is in a difficult position on student loans ahead of the midterms, as pressure builds from borrowers and Democrats for widespread cancellation. Adding to the pressure is a key deadline: On May 1, millions of borrowers will have to pay unless a freeze on federal student loan payments put in place during the pandemic is extended. Biden has been called on to extend the freeze until the next year — beyond the midterms. But advocates for forgiveness, along with key Democrats, want more than another freeze. “We’ve been saying for years now that we need to keep payments on pause until we cancel student debt,” said Natalia Abrams, president and founder of the Student Debt Crisis Center (SDCC).
The crush of people began at the 9 de Julio subway stop downtown, less than a block from the Buenos Aires obelisk, the city’s most recognizable monument. By 5:00 p.m. on February 8, thousands from over 100 trade unions, human rights organizations and student groups had blocked the main thoroughfare to protest a preliminary agreement between the Peronist, center-left government of Argentinian President Alberto Fernández and the International Monetary Fund. Amid a cacophony of competing drumbeats, demonstrators along Roque Saenz Peña bore signs that read “With the IMF, we return to the bottom,” “The IMF is poverty and unemployment,” and “Enough of austerity.”
When all else fails, when you are clueless about how to halt a 7.5% inflation rate, when your Build Back Better bill is gutted, when you renege on your promise to raise the minimum wage or forgive student debt, when you can’t halt the Republican suppression of voting rights, when you have no idea how to handle the pandemic which has claimed 900,000 lives – 16% of the world’s total deaths although we are less than 5% of the world’s population – when the stock market fluctuates on wild rollercoaster rides of highs and lows, when what little help the government offered to the labor force — half of whom, 80 million, experienced a period of unemployment last year — sees the termination of the extended unemployment benefits, rental assistance, forbearance for student loans, emergency checks, the moratorium on evictions and expansion of the child tax credits, when you watch passively as the ecocide gathers momentum, then you must make the public afraid of enemies, foreign and domestic.
“Puerto Rico received approval from a federal judge on Tuesday to leave bankruptcy under the largest public sector debt-restructuring deal in the history of the United States.” The executive director of the unelected Fiscal Oversight and Management Board declared it “truly a momentous day,” and a “new day for Puerto Rico.” How new, exactly, is the question of many who don’t see this debt deal as fundamentally changing the story for most Puerto Ricans, because that story has everything to do with the more than 100-year colonial relationship to the United States, and their enforced inability to determine their own economic future. Nor does it upend the notion that increased austerity is somehow, despite what you see, ultimately the way to shared prosperity and well-being.
On Wednesday, February 9, teachers across Puerto Rico called for a national strike to protest the government and the Fiscal Control Board’s (FCB) cutting of wages and pensions. Other public sector workers, namely firefighters and police, have also joined them. Teachers are demanding a decent salary, an end to pension cuts, and the resignation of Puerto Rican governor Pedro Pierluisi. Teachers have been protesting since February 4. That same day, the FCB imposed by the US Congress that has been in charge of Puerto Rico since 2016, was boasting because it supposedly already put the end of the bankruptcy process on track by approving a plan negotiated with the big bondholder funds.
Argentina is trapped in $44 billion of IMF odious debt taken on by corrupt right-wing regimes. Seeking alternatives to US hegemony, President Alberto Fernández traveled to Russia and China, forming an alliance with the Eurasian powers, joining the Belt and Road Initiative.
Activists and Puerto Rican community members protest against Steven Tananbaum, a board member of the Museum of Modern Art (MOMA), for his involvement in a hedge fund that owns over $2 billion of Puerto Rico’s debt, outside of the newly renovated and reopened MOMA in Midtown Manhattan on October 21, 2019, in New York City. Drew Angerer / Getty Images On January 18, Judge Taylor Swain of New York’s Southern District confirmed Puerto Rico’s eighth amended Plan of Adjustment (POA), setting into motion the closure of the largest municipal debt restructuring deal in the history of the United States. The POA modifies approximately $33 billion of the central government’s debt as part of Title III — the bankruptcy-like process established under the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) — which has already cost Puerto Ricans $1 billion.
The Federal Reserve is caught between a rock and a hard place. Inflation grew by 6.8% in November, the fastest in 40 years, a trend the Fed has now acknowledged is not “transitory.” The conventional theory is that inflation is due to too much money chasing too few goods, so the Fed is under heavy pressure to “tighten” or shrink the money supply. Its conventional tools for this purpose are to reduce asset purchases and raise interest rates. But corporate debt has risen by $1.3 trillion just since early 2020; so if the Fed raises rates, a massive wave of defaults is likely to result. According to financial advisor Graham Summers in an article titled “The Fed Is About to Start Playing with Matches Next to a $30 Trillion Debt Bomb,” the stock market could collapse by as much as 50%.
Student loans: many of us have them, all of us hate them. Over the past several decades, the student loan bubble has only continued to increase, now totaling around $1.7 trillion according to Federal Reserve estimates. There have been growing calls for the Biden administration to extend the moratorium on student loan repayments that has been in place since the beginning of the pandemic. Nevertheless, repayments are set to restart on February 1, 2022, at a time when over 3.3 million people in the U.S. have fallen into poverty during the pandemic; Covid-19 continues to spread throughout the US; and the Omicron variant threatens to bring a wave of new cases peaking as early as January, according to CDC estimates.
In a recent survey, 40% of homeowners with mortgages said they work second, full-time jobs to afford housing expenses. A majority of the 1,002 people surveyed by Consumer Affairs feel like they can't afford their housing expenses, and did not anticipate the extra costs of upkeep when they bought their homes. The report comes amid record surges in US home prices, also finding that more than a third of respondents are incurring extra credit card debt to pay their bills. Despite these challenges, homeowners ultimately prefer owning a home to renting one. The survey found that although 40% of people rely on second, full-time jobs to ease the costs of homeownership, nearly 100% of "house poor" homeowners have taken on side gigs to offset home costs.
A worsening economic crisis, compounded by brutal neoliberal policies, have ushered in a new wave of resistance in Puerto Rico. Nearly half of the population lives below the poverty line. More and more Puerto Ricans are leaving la patria, the homeland, in hopes of a better life in the United States. The archipelago has faced an onslaught of natural disasters, including the catastrophic Hurricane Maria in 2017 and a series of earthquakes throughout 2020. On paper, Puerto Rico is a “commonwealth” of the United States, a term that implies a kind of shared prosperity between the two places. In practice, Puerto Rico is a nation struggling to breathe under centuries of colonialism. It’s economy is dictated by an unelected Fiscal Control Board composed of hedge fund managers and vulture capitalists, known as la junta, which saw its power enshrined into law with PROMESA in 2016.
The U.S. Treasury draws on banking accounts at the Federal Reserve to fund federal governmental activities—remitting paychecks to federal government employees, sending Social Security checks, reimbursing doctors for treating Medicare-covered patients, paying defense contractors and interest to bondholders, and so on. These accounts are fed on an ongoing basis by both tax revenues and the proceeds from selling bonds (debt). But, because the United States has a statutorily imposed limit of how much outstanding debt is allowed, once this limit is reached on issuing new debt, Treasury can no longer sell bonds and deposit these proceeds, and hence accounts at the Federal Reserve will dwindle as they are now only fed by ongoing taxes, which are insufficient to cover all spending.
When you look at a student like myself, you don’t know that I am working multiple jobs, that I have gone without health insurance at some points, that I’ve been living at home with my parents for more than a year. You also do not know about my family’s medical debt, or about my father’s periods of unemployment, or that my mother’s job as a preschool aide isn’t enough to cover the gaps. Even though I have mowed my former mailman’s lawn for eight summers to help afford school, even though I secured two “free” years of campus housing through my job as a resident assistant and received numerous scholarships, awards and assistance, I still graduated from a state school with $17,000 in debt. I carry this debt from my bachelor’s degree as I go into my second year of graduate school.