Banks don't know which of their borrowers are insolvent - in a credit crisis, the problem isn't merely that the banks aren't paid what they are owed, but that there's a systematic increase in the perceived default risk of their borrowers on average. Giving money to everyone substantially lessens the overall risk of their loan portfolio. This encourages, of course, more lending.

The rest of what you're talking about is fairly standard economic stimulus and it's not that controversial or unprecedented and has little to do with debt jubilee.

I'm not necessarily against any of this - the point is more that the mechanism proposed (giving money to everyone with the intent of helping people pay off their loans) does not match the rhetoric (GP decrying too much debt and socialism for the rich).