Debt from student loans is among the most arduous kinds of debt in America currently. According to a number of statistics, approximately 43 million Americans are in debt from student loans debt, which totals about US$1.7 trillion. The high costs for higher education across the United States, combined with the fact that education credentials can be used as a way to gain good jobs, force many students to borrow money that lasts for a long time after graduation and is virtually impossible to be able to discharge when filing for bankruptcy.
Therefore, demands for the repayment of debt incurred by students via executive or legislative actions keep growing as President Joe Biden is expected to respond by directing the cancellation of a certain amount regardless of arguments against any amnesty for debts that are not blanket.
However, this exact policy is written on the U.S. Liberty Bell. “Proclaim liberty throughout all the land unto all the inhabitants thereof!” It states in a quote from the Bible Book of Leviticus, 25:10, that the Hebrew word that is translated as “liberty,” “door,” actually means amnesty for debts.
In the age of the Bible, it was a custom to repay all noncommercial debts periodically. As an academic of the past of the Near East, I’ve seen a number of cuneiform tablets that tell of how people in the past, as well as Americans, are today – frequently were in debt to cover the expenses of living. They may mortgage their homes to cover the heads of their families but then discover that the ever-growing interest rate made it difficult to pay the principal.
They also faced the danger of debt bonding. People who did not have enough assets to cover their debts were required to give their dependents, or even themselves, to their lenders. Their creditors then became their masters, and those who were pledged for debt became bound until they were paid back. A debt amnesty decree could wipe the slate clean by releasing people from their bonds and restoring their freedom and their fortunes.
Kings clear the slate.
The first recorded instances of this type of practice originate from the ancient city of Sumer, which was located to the south of what is today Iraq. Urukagina, the head of the town of Lagash about 2400 B.C., decreed a debt amnesty just after he acceded to power, allowing those who were under a debt obligation to return home and clear prisons. According to the Sumerian language, the amnesty was referred to as ” amargi,” which means “return to mother,” – as it brought people back to their homes.
Urukagina wasn’t the first to issue a similar decree, and it could have become a normative practice at the time of his birth. The custom of enacting debt amnesty has been described in the Semitic-speaking kingdoms of Syria and Mesopotamia in the first half of the Second millennium B.C. The death of a king often initiated debt amnesty: the successor of his would bring up a golden torch and issue a decree “anduraru,” or “restoration,” which was the Akkadian equivalent of the Hebrew “deror.” The declared purpose of such laws was to ensure or restore equity. The primary duty of a king was to preserve “justice and equity,” which is what Hammurabi of Babylon declared when he promulgated its laws in the year 1750 B.C.
While borrowing at interest is not considered unfair, the debt that took families of their liberty and property resulted in inequity and needed to be rectified. An order of “and rare” restored equity, rights, and family property by canceling debts incurred for subsistence – which included tax arrears to the state but leaving commercial debts unaffected. While Hammurabi lay dying, his son, Samsu-luna, assumed charge and issued an order that remitted noncommercial debts, resolving arrears and prohibiting collection. Thus, he declared, “I have established restoration throughout the land.”
A restoration decree could be issued in order to tackle any economic or political crises. The conqueror or usurper, who has imposed a nation under his rule, may decide to decide to establish their “restoration,” both remitting the debts of those caught during hostilities to escape. Hammurabi himself accomplished this when he conquered Larsa, the Kingdom of Larsa, which was part of the ancient Sumer.
The conqueror could then pose as a liberator, putting the rights of a ruined land. The intention was to restore the people living in the area to their former state prior to incurring debt, losing their property, or losing freedom.
Not as forgiving.
The issuance of debt-canceling orders was not consistent and not regularly scheduled, So it wasn’t easy to know when they would happen. Everyone knew that it would occur at some point or another. Finance professionals would thus prepare for the possibility of losing money when the debt was suddenly paid off and the collection was prohibited. They employed a variety of methods to shield investments and transactions from debt remission because otherwise, who would offer loans to people in need?
They created fictional legal equities to conceal the mortgage loan, debt bondage, and similar loans as other contracts to avoid their cancellation by decree. A Decree of the Ammi-sadaqah King from Babylon during the 17th century B.C. explicitly prohibits this kind of deceit. However, regulations were a step back for entrepreneurs. Innovative financial instruments protected debt from amnesty while keeping credit and profits flowing.
A program of regular debt cancellation was formulated within the Biblical law. It is said that the Book of Deuteronomy requires repayment of debts by Israelites each year in the seventh year by using the word “semittah” – “remission” and demanding that each creditor must pay back the debt due to him. In the Book of Leviticus adds the requirement of declaring the amnesty of Hebrew “deror,” at the end of each year cycle, which is seven. It also restores each Israelite to his home and family at the end of the 50th year – the year of the jubilee year. Conscientious of the fact that a planned amnesty for debts will only make the plan of creditors simpler, Deuteronomy 15:9 warns against not lending when the seventh year is nearing.
The biblical writers likely had experiences with the efforts of creditors to avoid the obligation to pay back debts, as per the Book of Jeremiah, when Zedekiah, the last king of Judah, declared “error” in the face of the Babylonian invasion in 587 B.C. The creditors agreed to free their enslaved fellow Judeans but then came up with ways to make them return to the bonds of.
In addition, not only was the apparent reason behind the debt-remission laws overturned by the use of creative credit instruments, but the actual basis for these decisions was never to solve the issues that led to them being needed. It was still necessary for people to borrow money to live, pay their taxes, and ensure an adequate roof over their heads. They’d still be at risk of becoming impoverished as well as debt bondage and ultimately becoming slaves. The cancellation of debts on a regular basis didn’t eliminate the problem of chronic debt or was intended to.
However, the purpose of these decrees was to restore the socioeconomic equilibrium – and also the tax base to the point of ensuring that the borrowing cycle of money to survive could begin again. In a way, the purpose of debt amnesty was to bring society back to its ideal condition of equity and inequity, which meant that organizations would never require the same solution to be able to do it again.
This issue is worthy of consideration in the wake of calls to cancel students’ loans. Certainly, an amnesty for student debt will help millions who are bound by the cost of loans that they borrowed with the expectation that a degree could guarantee their employment. It will not help solve the issues which make the taking of these debts important.
In the event that higher education is seen as a personal item and a necessity for a job, individuals will have to borrow money to obtain degrees. In the future, the same method is required again.