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May 15, 2014

Social Shmitta - wiping away debt

I like the initiative of what is being promoted as "shmitta chevratit" - social shmitta... the promoters want government offices and other public debt holders to honor the mitzva of shmitta in regards to financial concerns and wipe away any financial debt, at least for segments of the population that are economically weaker.

I like the idea in a general way. Any aspect of keeping shmitta more, and especially with intent on helping those who need it, is good.

Deputy Minister of Religious Affairs Rav Eli Ben Dahan has joined the group of those who want the shmitta chevratit. Ben Dahan said that government institutions are able to wipe away the debts. He called upon institutions to wipe away the debts of the elderly - such as Bituach Leumi, banks, and other public institutions...
source: Srugim

I would not mind if they wiped away my mortgage..

While I like the idea, I am not sure why institutions, especially banks which are really privately held, would wipe away the debt, which probably adds up to a lot of money. Just like people will keep their privately held debt, perhaps by writing a pruzbol, I imagine most institutions won't want to give up all that money either, and will want to employ the pruzbol or whatever else they might do. Just like some farmers will keep shmitta and not work the land at all, while most will employ the hetter mechira.

I guess if even just a small number of institutions wipe away the debt, it will be good - it will help some people, it will be a start of a good thing. Maybe next time maybe more will do similarly.

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  1. I saw the initiative sent out last Shabbat with the parsha pages and it had too many of the far left-wing organizations on it to my liking even if they did score some rabbinical approval inside.

    Nice thoughts but experience shows that this would just give people an opportunity to go into debt again. The key is to change/improve economical awareness with the people in debt. I'm in overdraft, but refuse to take out a loan at a lower rate that would make me feel that I was in control.Instead, I argued with the bank to reduce the rate on the overdraft and succeeded. People who take the loans most normally fall into a sense of being able to go back into overdraft because the sum of the loan does not appear in the bottom line of the account.

  2. Sure, let banks wipe away debt. The losses will be passed on to account holders and stockholders. The value of everyone's retirement fund will go down, interest rates on savings will drop, and mortgage rates will go up. In the end, the public will lose the same amount of money.


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