Forgiving debt would not only have a hyperinflationary effect on the currency since everyone will suddenly have massive surplus income but it's down right unethical. What about people who did not take on any debt? Will the government give them free money? How can we make it fair to people don't have any debt. Also, not everyone who has debt has the same amount of debt... Forgiving debts is akin to the banks giving free money only to people who have debts. It's ridiculous, why not give every person in the US 1 million dollars each? This should allow the vast majority of people to pay off their debts. That is still unfair though because massive hyperinflation won't give people the time to even spend their money so they would still be severely disadvantaged relative to debt holders who own assets.
But anyway, debt forgiveness would completely destroy the fiat monetary system. Nobody will accept Dollars or Euros or any currency backed by a reserve bank which forgives debt because the amount of currency that would flood the system is unfathomable.
The price of cryptocurrencies would double every hour, that kind of crazy.