It’s Time to Cancel Unpayable Old Debts

The concept of odious or illegitimate debt is something generally not discussed by politicians, media or economists. By it’s very definition, all debt denominated in fiat is odious as it is created out of nothing and will be cancelled by the re-emergence of a sound tri-metallic monetary system backed by bills of exchange. This article is from 2012 and the issues in Greece have not and will not resolve themselves, debt is control and they will not quietly go into the night. Courtesy of Aditya Chakrabortty @ The Guardian:

In the week between Christmas and New Year, those bleary few days when the world has better things to do than catch up on news or check its Twitter account, The Guardian carried a story that bears repeating. It was about Dimitris and Christina Gasparinatos and their kids in the Greek port of Patras. For ever hard up, the parents had been pushed by the economic crisis into outright poverty; and just before Christmas Dimitris and Christina put four of their children into care.

Nor is the Gasparinatos’ case an isolated one. Greece must be the most family-centric society in western Europe, yet its media is full of reports of newborns dumped outside clinics, or infants shunted into foster homes.

Such stories almost never come up when politicians and economists debate Europe’s meltdown; implicitly, they are categorised as fall-out, for journalists and campaigners to highlight. Yet the abandoned children of Greece are not merely coincidental to those discussions about how to tackle the debt; they are integral to it.

Strip away the technicalities and you are left with two ways to think about the debt crisis. One is as a battle between the past and the future. The vast majority of Greece’s debts are historic commitments made to creditors by previous governments, sometimes in very dubious circumstances. Yet Athens has been forced to prioritise repaying these old loans over generating economic growth, or future income. One result of that policy has been to snatch away whatever chance the Gasparinatos kids might have had of decent lives.

Something similar is happening in Britain. David Cameron came to office with the primary goal of paying down debt. Less than two years later, his ministers are now obliged to go on the BBC at regular intervals to explain why more than a million young people are out of work. Study after study shows that a young adult unemployed at the outset of his or her career suffers permanent damage to their prospects, yet this government’s economic policy favours the past even though it means ruining the future.

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