With the "Rolling Jubilee" (HT - Evan).
I say "sort of" because the difference between TARP and this program is that all the debts that OWS is buying up are going to be forgiven. But this is still quite extraordinary to me, because from the big bad corporations' perspective the Rolling Jubilee is exactly the same as TARP: an opportunity to offload toxic assets. In fact, since the guys at the other end of the table this time are not representatives of the most powerful government on the planet, I imagine there will be even less arm-twisting and *wink-wink* coercion than under TARP.
This is obviously great from a debt-deflation perspective and great from a humanitarian perspective. In fact the first thing I said to Evan (before saying "wow - OWS is basically supporting TARP") was "gee - the Fed and the Treasury should be doing this too". But I'm not so sure about that...
There's clearly moral hazard problems with debt forgiveness. Buying the debt first just exascerbates that. And if you were going to risk some moral hazard it seems like you should have done it in the middle of the financial crisis when it could have done some good (and when TARP did do some good). But that was four years ago (can you believe it's been that long?).
I also wonder a little about whose debt they forgiving. I assume they are targeting debt that is somehow in default, but I don't know.
What we need is demand. Debt overhang prevents that, but increasing demand can also prevent the debt from hanging over so much!