Since it is Jubilee that sweeps away the previous monetary and financial system, we need to carefully define with some precision what we mean by Jubilee:
All debt of citizens and of federal, state, and local governments will be discharged and declared null and void, and unenforceable. This full discharge includes both secured and unsecured debt, and any guarantees of such debt are also declared null and void.
Further, to avoid coercion with respect to access to possible future credit, it will be ILLEGAL to repay any previous debt, except that between two Persons, in which case voluntary repayment will be permitted but not required.
Cancellation of all debt applies to all lenders, domestic or international. No action for collection of discharged debt in courts of other countries will have any force in the United States. It will be illegal for any American Person or US Legal Entity to repay any international debt.
Debts of business and other legal entities will be canceled and will be replaced by Cumulative Convertible Preferred Stock (henceforth “Special Preferred Stock”) in the amount of 80% of the principal value of the outstanding loans and at the same interest rate. The conversion price will be calculated based on 80% of the principal of the debt and the fair market price or appraised value of the firm. For example: if a company had a loan for $10 million at 5% and the company was worth $100 Million, then the Special Preferred Stock will be issued in the amount of 80% of $10million = $8 million, at 5% interest, and convertible at the option of the holder into an 8% equity interest in the company.
There will be a 12 month grace period before dividends would be due and payable on the Special Preferred Stock to give the economic system time to spin back up fully. And unlike debt, with preferred stock if some businesses still can’t service the dividends at the end of a year, nothing very dire occurs; the dividends merely accumulate for future payment.
A newly established National Endowment of the United States (hence forth “National Endowment”) will become the owners of the Special Preferred Stock.
The National Endowment will manage its assets much like any other endowment: for income and capital appreciation, compatible with the long term preservation of capital. The National Endowment or its agents may sell, convert, or trade its Special Preferred Stock for other securities to accomplish those ends. A dividend commensurate with preservation of capital will be paid per capita to each citizen.
We have estimated that each citizen will receive approximately $80 per month in National Endowment dividends.