Giving bankrupt entities the ability to borrow more money does not make them solvent, and so if we look past manic rallies in risk assets, we see that debt will still have to be renunciated, written down, forgiven, wiped off the books--whatever terminology you prefer. CHS


PART 5: Deficit spending: National absurdity, international gamesmanship, and manipulation by transnational corporations

Analysis: About all that can be said for the major global economies of the U.S., China, the European Union, et. al. is that they are collectively insolvent and engaging in massive interactive fraud, misrepresentation of national financial health, and mutual exploitation.

The U.S. as the overseer of reserve currency is trying to print its way back into solvency and its banks, like Goldman Sachs, have provided the poison pills for EU implosion with their fraudulent derivatives. Europe will not face the facts that it has unsustainable welfare state commitments and that its banks extended credit and covered debt for Greece, Italy, Portugal, Spain, and Ireland (often through private banks in those countries) that were not warranted and could not be paid back.

China (the current growth darling) is devaluing its currency, destroying its environment, poisoning its population, experiencing growing unrest, separation of wealth, collapse real estate values, and corruption in governance in the government’s effort to maintain unsustainable growth, trade imbalances, and grip on autocratic power.

The real threat, however, to the global economies is not nation against nation but transnational corporations allied with so-called “ruling elites” against 99% of us. This alliance is intentionally playing nations against each other in an effort to control, maximize, and concentrate parasitic wealth in the hands of a global few at the expense of productive middle class citizens.

There has been no better evidence of this than the eerie world-wide cover-up and bailing out of derivatives and bank fraud, the non-prosecution of hundreds of thousands of confirmed cases of forgery over private property conveyance (United States), the hollowing out of national revenue and well-being through austerity (Ireland), and the stripping of national assets and sovereignty (Greece with more to come). Bought and sold has acquired a whole new level of meaning.

Intervention: Growing awareness and unrest are beginning to challenge this pattern, but what are its implications for debt forgiveness? Hopefully global movements will lead to much needed turnover in world governance or non-violent social revolution and civil disobedience that renders illegitimate the hold current government leaders have on power.

Frog-marching bank executives and other abusers of the global public trust in front of the International Criminal Court could bring the same legal and moral accountability that applies to ruthless dictators. These abusers could be charged and convicted, their personal assets confiscated, their Swiss banks accounts raided, and their persons thrown in jail, or (if one is to get into the spirit of forgiveness) they could be required to do community and national service for the rest of their lives to compensate for the damage they have caused.

Nations who finally elect people of integrity in government with the wisdom to recognize environmental, cultural, social, political, and economic interdependence and the fortitude to prosecute international financial criminals would be well advised to collectively zero out national debts.

What countries owe one another is a pittance compared to aiding and abetting of hundreds of trillions of dollars of publicly supported private fraud. Even “real number” debts have dubious foundations: The U.S. supposedly “owes” China a trillion dollars or so, but China has likely taken at least that amount from the U.S. in intellectual property theft (industrial patents, computer software, and entertainment) as well as the sale of counterfeit brand name goods.

The same unregistered reciprocity exists with the couple of trillion or so the U.S. owes India and Saudi Arabia. India has benefited massively from the public U.S. university system and the private offshoring of technology jobs, and Saudi Arabia has been able to hold a stable grip on its repressive power largely with the implicit backing of U.S. foreign policy and military.

I’m not sure what would come after international debt forgiveness. Global youth are much interconnected and cooperative. Perhaps a global currency will come into existence, based on a kind of “Esperanto dollars,” backed by some agreed upon standard of exchange value. I would not be surprised to see formal national money take a backseat to voluntary forms of exchange and trade like local currencies or swapping of services, skills, and information.

Environmental damage: Global pollution and resource abuse as debt

Analysis and intervention: I won’t comment much on this except to encourage readers to treat as a massive debt the kind of “borrowing” we have taken from Mother Nature in the form of resource extraction and literal deposit of “toxic liabilities” in the form of pollution. This debt will not be forgiven by more trickery or a fundamentalist belief in the magic of the market (though creative market responses will be essential to slowing damage and creating sustainable opportunities). I am highly suspicious of speculative markets like carbon trading, just as I am of speculation in water supply. These arenas are too intrinsic to human survival to be toyed with in largely abstract, remote, and ripe-for-abuse speculative market posturing.

Debt forgiveness here really involves a whole-scale transformation about how we relate to ourselves, each other, and the world around us. Honoring our debt to nature means that we recognize our pursuit of happiness depends upon our physical sustenance. This will require comprehensive education, re-grounding in natural experience, and recommitment to simple living to pay down the massive debt of ignorant living to which we have grown accustomed.

It will call for an evolution of ideas of the good life that move from physical manufacturing, use, and exploitation of the material world, to one where the material world provides only the bare support needed to explore, expand, and develop our increasingly non-material opportunities and aspirations. I personally find this a heartening and exciting direction, but many are likely to view it as a step down. This will be one of the most important global conversations in the next century.

Conclusion:

One of the greatest barriers to enacting alternatives is getting over the false idea that debt is some kind of either natural phenomenon or moral law. Debt is not natural; it is created by humans and can be erased by humans. There is nothing moral about a nation running up its children’s national credit card to the tune of 15 trillion dollars (with another 100 trillion+ in federal entitlements) and expecting the next generation to pay it. Nor is it morally reasonable to expect individual people, who have worked hard and followed the economic rules, to suffer with life-long debt servitude for mid-game changes in the rules and shifts in the global context.

In point of fact, our current “sea” of international debt is merely a very large man-made lake, damned up by ignorance, greed, and exploitation. The only healthy way to manage current debt is to drain this lake completely through debt forgiveness. It is time to take down the dam and let democratic prosperity flow. True, people will not get their individual material dreams and hopes of unlimited riches fulfilled, but they will take important steps toward preventing a war of humanity against itself, and they will be able to engage new opportunities and definitions of the good life involving working together creatively to build a better, more just world.

Instead of the old dream where we impose static past fantasies on a dynamic future, we can embrace a new dream where we create, explore, express, unfold, and reinvent who we are and what we can be through shared, interactive achievement and improvement. The old economic system based on scarcity and false security is thus converted toward new ends—freedom, health, quality of life, creativity, autonomy, and mutuality.

In pursuing this progress in jubilee, we go a long way to clearing out our past entrapments, inequities, and animosities. We also wisely devote our shrinking material resources toward developing a widely shared and exchanged, mostly non-material, experiential and social currency that multiplies in abundance and increases in value the more it is shared.

by Zeus Yiamouyiannis, Ph.D., copyright 2011. All opinions presented in this essay are solely those of the author.


About this series: Given accelerating conditions and trends in Europe, the U.S. and Asia, debt will be renounced, forgiven or written down, and how that process unfolds is now of paramount importance. Will private entities who dined so gloriously on their profits now eat their losses? Can the public who has seen its fortunes commandeered mount an effective response? Will there be convincing practical alternatives to a rigged world economy based in debt expansion and servitude? The answer is "yes" to all three, contends this five-part series by longtime contributor Zeus Yiamouyiannis. The series offers practical analyses and blueprints for liberating the world from debt and thus freeing its people to pursue greater, more productive purposes. CHS

Unleashing the Future: Advancing Prosperity Through Debt Forgiveness (Part 1) (November 28, 2011)

Unleashing the Future: Advancing Prosperity Through Debt Forgiveness (Part 2) (November 29, 2011)

Unleashing the Future: Advancing Prosperity Through Debt Forgiveness (Part 3) (November 30, 2011)

Unleashing the Future: Advancing Prosperity Through Debt Forgiveness (Part 4)
(December 1, 2011)

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