Public Debt Forgiveness
Even with these immediate steps ... many of the poorest countries won’t be able to make the resulting debt burdens sustainable in the medium term, he said. I urge the G20 to open the door to consultations about the debt overhang itself and effective ways to reduce the net present value of both official bilateral and commercial debt for the poorest countries.
By J.M. Hamilton (7-26-2020)
Neoliberalism or laissez faire economics fell on its face in 2008, and the congress & FED rushed to bailout market rule. The American people were not so fortunate. No lessons were learned from 2008. The crisis was papered over with trillions in debt and the wealthy didn’t suffer so much as a scratch. In fact, they only grew wealthier. Now, in 2020, thousands of U.S. companies, and small business owners, are going bankrupt, leaving tens of millions of Americans unemployed. Once again, market rule – oligarchy – is a catastrophic failure… leaving America a pitiful giant – indeed, a healthcare pariah - on the world stage.
The only thing remaining of permanence, that is to say, not propped up or bailed out w/in the U.S. economy, is the Federal government. When markets collapse, when banks crash, and businesses fail by the thousands … billionaires and multinationals bend the knee to the Federal government. Completely the opposite of the what POTUS Reagan preached for two consecutive terms, when lethal globalism and neoliberalism was offered up as the future.
Of course, America doesn’t create much anymore. Commercially, the U.S. increasingly appears to be one large holding company, a corporate & tax haven… while most anything meaningful is produced & manufactured offshore, in a never-ending game of labor, regulatory, and tax arbitrage. The goal now, the corporate mission statement, is to become too big to fail. Make that balance sheet so big, in a given industry, that the government has to rescue the cartel or monopoly. The corporate goal now, is to become a rent seeking utility, load the company up with debt to the breaking point – for the exclusive benefit of C-suite management and shareholders, collect rents, eviscerate American labor, and screw the consumer. The ALEC/Neoliberal/US Chamber objective, after making sure the political duopoly is captured & owned: malign & talk down the U.S. government; defang all regulatory bodies; starve the government of revenue; tell 99% of Americans there is zero money left to spend on childcare & higher education; and bleed Medicare & Social Security dry.
And surprise, surprise… the self-fulfilling prophecy comes to be: The Federal government, seemingly, is the problem and can’t deliver (except for unlimited bailouts for the connected & powerful). And yet, for the duration of the pandemic, the government is the only game in town.
It’s no accident that the United States is a house of cards built upon debt, and that financial engineering & private equity are the preeminent business practices. The collection of rents is the path of least resistance for a very tired elite, little or no thought required; the end game of a failed neoliberal dogma. The Federal government and the FED, too, are leveraged to the hilt, by design. Over the last twenty years, the national debt has soared from approximately six to twenty-six trillion dollars. And the United States has very little to show for it, but: self-aggrandizing, self-serving billionaires & monopolies.
American healthcare is in ruins and the U.S. Senate went on break this weekend, while tens of millions of Americans don’t know where they’re going to find August rent.
To write, the grand illusion – laissez faire economics - no longer works is an understatement. We have in place a system that rewards billionaires & multinationals -– because they were connected enough, greedy enough, or simply at the right place, at the right time, to take advantage of all the gifts the U.S. government & society have to offer -- while leaving one in five American children living in poverty. And the number of children living a precarious existence will surely rise. The Ayn Rand storyline – in markets & monopoly we trust - is bust. Toppled by an entirely foreseeable event: the plague (which has been around since the dawn of humanity).
So how about a new paradigm? Rather than enslave & indenture newborn Americans, from birth, so that a bunch of rent seeking utilities can mint profits, the U.S. adopts a less lethal economy: a mixed economy that favors ordinary citizen, in lieu of predatory monopolies? Instead of the Federal government, and the FED, backstopping TBTF monopolies and utilities, idle speculation in rigged markets, inflated asset prices, crooked politicians & crony government, and an ocean of debt…. What if America wrote down the national debt – methodically & gradually to protect the currency & prevent inflation – in a coordinated event with our allies and interested parties (many of which are also up to their eyeballs in debt)?
What if we wipe the public balance sheet clean, gradually? What if the U.S. government backstopped ordinary Americans for a change: with badly needed infrastructure; a renewable energy grid, that does not destroy the planet; free college education; affordable housing; and last but not least, a guaranteed jobs program or universal basic income? Just for starters… what if we kissed the empire, the police & surveillance state, and the money sucking military industrial complex goodbye? Or significantly, cut the spending on bloodshed and mayhem the U.S. is involved in globally, as well as, ever increasingly, here at home?
Crime Wave
At this point, given the colossal failure of elites, multinationals & markets – as well as, the neoliberal/neocon paradigm – really, what do we have to lose… other than thousands and thousands of American lives? It appears that highly amoral priorities have led us to a very dark place.
How can America justify another decade, or more, of chronic depression and/or recession, another lost generation, shortened lifespans, greatly diminished economic prospects, and austerity as far as the eye can see … so that we can service trillions and trillions of debts used to bailout billionaires, multinational welfare junkies, and finance credit card wars???
The answer: We can’t justify it, nor should Americans stand for it.
Why pay taxes in support of an economy, an empire, and a burned-out ideology that no longer supports the majority of Americans?
Even Wall Street banks & insurance companies - the C-suites and investors who brought us to this terrible place - have little to lose, when Treasuries are range bound at zero or near zero yields, and junk debt is grossly underpriced. America has run the economy & government for the benefit of privileged white males, and, collectively, these same individuals have single handedly burned the country to the ground (but only after looting it).
No wonder so many Americans are willing to toss capitalism to the curb; what passes for capitalism today – what is in fact fraud - tossed nearly half of all Americans to the curb a long time ago.
And it’s only going to get worse from here.
Copyright JM Hamilton Publishing 2020
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