Report: Mass Default

Recently, the spectre of mass default has been raised in a number of publications and forums.

From, an online “anti-capitalist clearinghouse”, the Oakland Commune declares:

THE TIME HAS COME FOR MASS DEFAULT. Every debtor an Iceland! This is in some sense already happening as if by accident, as lives shudder under the unsustainable burden. It’s time for default as an organized, general strategy of self-defense and war on the owners of our present and future misery — a form of solidarity with strikes, sabotages, squats. It will require the organizing of communities to provide basic needs for the garnished, the liened, the excluded. This is both strategy and a renewed social order. This will be the practical meaning of a politics of friendship.

The website offers a list of possible actions:

  • If you are a student, spend on your credit card and default.
  • Take out a bank loan and default.
  • Start or join a credit union.
  • Take out as much credit as you can, then when necessary declare bankruptcy (its not as bad as you think)
  • Form groups, stick together, this type of action in the world we live in can create isolation and anxiety. (Student food banks, markets, book swaps, car share, etc etc..)
  • Declare bankruptcy, if you are struggling try not to deceive yourself, its ok… its not shameful, these are tough times, don’t beat yourself up, you are actually doing some good!
  • Engage in direct action against mega banks.

In case the notion of choosing default seems like petit-bourgeois tantrum-throwing, there are those for whom default is the only option — and their numbers are rising.

From The Department of Education (September 12, 2011):

The U.S. Department of Education today released the official FY 2009 national student loan cohort default rate, which has risen to 8.8 percent, up from 7.0 percent in FY 2008. The cohort default rates increased for all sectors: from 6.0 percent to 7.2 percent for public institutions, from 4.0 percent to 4.6 percent for private institutions, and from 11.6 percent to 15 percent at for-profit schools.

Reclamations Journal has just produced an excellent resource for the coming default — a pamphlet called “Generation of Debt: The University in Default and the Undoing of Campus Life”.