Betting with Trillions
Prison of Debt Paralyzes West
Be it the United States or the European Union, most Western countries are so highly indebted today that the markets have a greater say in their policies than the people. This 2012 excerpt is from Der Spiegel, Nov 16.
by Cordt SchnibbenWhy are democratic countries so pathetic when it comes to managing their money sustainably?
Leaving the gold standard liberated financial markets from limited money supplies, which was mostly beneficial; and the liberation of countries from limited revenues, which was mostly detrimental. This money bubble continued to inflate for four decades, as central banks were able to create money out of thin air, banks were able to provide seemingly unlimited credit, and consumers and governments were able to go into debt without restraint.
When the debts of companies and private households are added to the public debt, the sum of all debt has grown at twice the rate of economic output since 1985, and it is now three times the size of the gross world product.
Interest spending is now the third-largest item in Germany's federal budget, and one in three German municipalities is no longer able to amortize its debt on its own. In the United States, the national debt has grown in the last four years from $10 trillion to more than $16 trillion, as more and more municipalities file for bankruptcy. In Greece, Spain and Italy, the bond markets now indirectly affect pensions, positions provided for in budgets and wages.
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JJS: While news to the author of this interesting article, actually, politicians have always cut deals with financiers and run up huge tabs, not providing services to the general public but handouts to insiders. Back during the US rebellion against the UK, it was the same story. Tom Paine, the man who christened the new country “the United States of America” and whose writings kept up morale long enough for the rebels to finally win, also helped win financing for the war from France and helped found a bank to deposit the French gold which went on to become the first national bank of the US.
Tom also knew how to correct and avoid financial crises. That is, keep the value of land and resources out of the speculative market. And that can be done by taxing land, a policy Tom recommended, along with a rent dividend.
You can watch an actor, Ian Ruskin, bring Paine’s vision to life at “Tom Talks: Common Sense & Reason inn the 21st Century" . If only enough of us were ready to put his words into action.
Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .
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