Question

) American citizens are getting increasingly into debt. In Biblical times, a jubilee was a year in which debts were forgiven. There have been recent calls to cancel debts for everyone. Why? What would be the economic impact of such a decision? Who would benefit from such a decision and who would suffer?

Answer 1

What is American Jubilee :-

American Jubilee is said to be a situation of high debt crisis in the economy and nationwide private debt cancellation as its solution.

​​​​​​Factors responsible for American Jubilee :-

Following are some of the factors responsible for American Jubilee :-

1) The American Economy is struck under the consumer debt trap .

2) Demand crisis and fallouts from the housing bubble .

3) Wage stagnation for most of the Americans.

4) The wealth gap is getting bigger .

5) Growing anger towards the elite class .

6) Ineffective of government to provide solution.

Benefits :-

​​​​​​1) This will relieve the borrowers from debt trap .

2) Increase in demand in the economy .

3) Improve wage stagnation situation.

4) Bursting out of debt bubble .

5) Removing stagnation of the economy.

Problems :-

1) Chances of increase in inflation.

2) Millions of investors and creditors will lose fortune .

3) Chances of stocks to collapse .

4) Bankruptcy of many companies.

5) Due to cancellation of old debt , their will be a tendency to borrow new debt .