The Lending Strategy

This essay is part of the Plan for Action series.

    In the Debt-Free Society series, one key goal is for individuals, followed by organizations they create, to get out of debt and build wealth. At the same time, many of the people in the way of the free and stateless society, want to spend everything they can, right away.

    This leads to the Lending Strategy, where we can make these trends work together.

Lending as "Investment"

    To take back a city as a "free city," members who are building a debt-free society first start building themselves up, and then build what appears to be a "volunteer" organization that invests extra money in city bonds. In this case, people who are unwilling to take action and keep sending their tax checks, are now sending them to us.

    As the city's relative debt grows, and as the "Debt-Free" organization keeps buying the bonds, the city finds itself in a situation where it has borrowed too much, and perhaps during a downturn it cannot pay back all of the bonds.

    At this point, the organization uses it position as a creditor to negotiate a deal: Since this is already a volunteer organization that is already taking care of some social function, the city can simply suspend or reduce any program it has, and let the free society take over. At the same time, the organization offers better repayment terms.

Incremental Buyout

    As this process continues, different communities will allow different social functions to be "bought out" or "bought back" from government back to the people. As this happens, and as freedom and statelessness succeed, we then promote these successes as heavily as possible. As different cities near bankruptcy, and when they have no one to turn to in an economic downturn, they may not have much room to negotiate otherwise.

Weaknesses in this Strategy

    One weakness to consider with this strategy is a hostile, anti-freedom national government that starts printing money to dilute the effect of people taking back their societies from the state. This require some planning to be ready for the specific attack on saved money and on debt.

    What printing does not do, of course, is change the fact that local government got into trouble originally by being fiscally irresponsible. Money printing merely spreads out this irresponsibility, and long-term creates its own trouble. If we save in such a way as to again be in a position to say "we will fund your pension if you give this social function back to the people," we can still make this strategy work.

We can discuss this and other strategies in the Debt Free Society group. I'd love to hear your ideas.