Category Archives: The Debt Imperative

What we can and cannot afford

Can we afford health care for all, free education for all, housing for the homeless, food for the hungry, a decent and efficient national system of transportation, a clean and healthy environment, a fair and equitable distribution of our collective production, and a true democracy in which people decide their own fate and how their money is to be spent? Politicians of all stripes tell us we cannot. “Where will the money come from?” is their plaint whenever such measures are proposed.

But other countries have many of those things. There is a vast number of countries that have free or almost free universal health care, as can be seen in this list. And here is a list of 11 countries that have BOTH free universal health care AND free college. The list includes not only affluent countries like Sweden, Norway, Denmark and Finland, but relatively poor countries such as Greece, Argentina and Brazil.

Anyone who has traveled in western Europe knows that Amtrak is a bad joke compared HSRinChinato the extensive and efficient rail systems in Germany, Austria, Switzerland and elsewhere. China too has much better trains than the U.S. and has been rapidly expanding its transport infrastructure. According to Wikipedia, China already has “the world’s longest high speed rail network” which is “also the most extensively used, with 1.713 billion trips delivered in 2017 bringing the total cumulative number of trips to 7 billion.”

Way back in 2005 I rode from downtown Shanghai to the airport at  Pudong on the maglev train that reached speeds up to 431 kmph (268 mph).

Yet, when President Trump calls for an almost $80 billion increase to the military budget, hardly anyone asks, “where’s the money going to come from?” and the measure easily gains Congressional approval.

Here are the things we cannot afford:

  1. We cannot afford continuation of the Empire with its deployment of military forces around the world and endless overt and covert warfare.
  2. We cannot afford continuation of the interest-based, debt-money regime that forces unnecessary expansion of economic activity and centralizes power and concentrates wealth in the hands of a super elite.
  3. We cannot afford continuation of the environmental destruction and climate change that is caused by the fossil fuel based economy.

The $727 billion U.S. military budget for 2019 dwarfs all other segments and amounts to 61% of all discretionary spending. To trump2019_discpie_unbranded_largeput it in perspective, the U.S. spends many times more on military than any other country. According to the National Priorities Project, the next highest military spender, China, spends only about one third as much on its military.

I have written extensively about the defects inherent in the centrally controlled interest-based, debt-money regime, which is driving the endless expansion of debt that makes economic growth an imperative. See, for example, my article, Money, debt and the end of the growth imperative.

Ultimately, if we do not take appropriate action, nature will decide our fate. See the work of Joseph Tainter and Jared Diamond, starting with this interview of Joseph Tainter by Jim Puplava.

In a future post I will elaborate upon these points, but for now I recommend viewing the recent Jimmy Dore show at https://youtu.be/yHpN7X9iK3o.

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Central Bank Interventions and the Looming Catastrophe

In this recent interview below, Dr. Paul Craig Roberts describes the “house of cards” that is today’s global regime of money, banking and finance. Since the financial crisis of 2008, the major central banks around the world—the Federal Reserve, the Bank of England, the European Central Bank, the Bank of Japan—have all been active in the securities markets, buying huge amounts of government and corporate bonds and shares of private companies, a process that is euphemistically called “quantitative easing.”

As Roberts points out, these actions are being taken to support the big banks. I agree, but it goes much deeper than that. The underlying objective is to preserve the global interest-based debt-money system which requires continual expansion if debt, an inherent systemic flaw which I call the “debt growth imperative.” The result of these market manipulations, of course, has been the inflation of market bubbles in bonds, stocks, and real estate, and the massive transfer of wealth into the hands of a small segment of the population.

Roberts does not mention it, but the recurrent waves of tax cuts for the rich likewise seem to be designed to keep these market bubbles pumped up. The wealthy class, for the most part, does not spend these windfall gains, they invest them in, you guessed it, bonds, stocks and real estate. If tax cuts were to go mainly to the lower and middle classes, what would they do with the money? They would surely spend much of it, which would stimulate consumption of consumer goods and restore the real economy, but much of it would go toward reducing the massive amounts of debt that these people carry and make it unnecessary for them to borrow even more. A system that requires perpetual expansion of debt cannot tolerate that.
Now, do you understand?

 

Thomas Greco’s Latest Interview–March 3, 2017

Here is my latest interview on Primo Nutmeg. Discussion topics include alternative currencies, credit, central banks, the Federal Reserve, Austrian economics, the gold standard, bitcoin, geopolitics, and the relationship between U.S. foreign policy and the global system of money and finance.

“The Big Lie” and the tragedy of Europe –Yanis Varoufakis blows the lid on Europe’s hidden agenda

In this interview, former Greek finance minister, Yanis Varoufakis, outlines the nature of the 2008 financial crisis, the reasons for the program of “quantitative easing” and the irrational actions of the western European leaders. The fundamental point he seems to miss is the debt growth imperative that is inherent in today’s global money system, the underlying fact that keeps everyone trapped in a system that is driving the whole of civilization toward disaster.

Recovery? What recovery?

Despite the happy talk coming out of Washington and New York about the supposed economic recovery, the present economic and political order remains on course toward self-destruction. I’ve said it over and over again that the fundamental flaw is the compound interest that is built into the global debt-money regime. The fact that virtually all money is created by banks that “lend” it into circulation at interest causes debts to grow faster and faster with the passage of time. A quick glance at the timeline for public and private debt makes this obvious.Total-US-DebtTo2014

Prof. Richard Wolff, in the video below, does not mention this debt-growth imperative, but he does a good job of explaining how the governments and the central banks managed to temporarily forestall total collapse following the 2008 financial crisis, and why their actions are failing to solve the basic problem of slack demand.

We need to look beyond economic ideologies to find ways of defusing the debt bomb which grows bigger and more deadly with every passing day. A shift toward innovative, interest-free, approaches to the exchange of value and the financing of enterprise development provides the most promising route toward a soft landing. See The End of Money and the Future of Civilization.

Bloomberg: The IMF Should Get Out of Greece

It has long been evident the Greek government, over the years, has been so overburdened with debt that much of it would eventually need to be forgiven. Now, even the mainstream media is touting that as the necessary solution to Greece’s predicament. In his recent article, published on the Bloomberg website, Princeton Prof. and former IMF deputy research director Ashoka Mody argues that the IMF is to blame for Greece’s debt situation and that it ought to pull out. He proposes that the IMF’s principal shareholders — the Europeans and Americans, must “honorably accept real losses.”

But he also points out that “the IMF’s Board, over the fierce opposition of several executive directors, the Europeans and Americans pushed through a bailout program that, contrary to the fund’s rules, did not impose losses on Greece’s private creditors. The decision was based on a spurious claim that “restructuring” private debt would trigger a global financial meltdown.”

So, here we have another case of private bank creditors being bailed-out. Yes, the Greek debt must be forgiven to allow the Greek economy to recover, but the burden now falls upon European and American citizens instead of on the banks’ owners, where it properly belongs.

A World Without Money and Interest

During my October tour, I gave three presentations in Kuala Lumpur, Malaysia and another in Sardinia, Italy. Two of the Malaysia presentations were at the International Forum on Inclusive Wealth, but I do not yet have recordings of those. The third was an extended presentation and discussion (on October 10) at the Institute of Advanced Islamic Studies titled, A World Without Money and Interest: A pathway toward social justice and economic equity. Here below is the video of the proceedings, or you can watch it on YouTube at https://youtu.be/8BejigzDAVY. The audio only is here, and the slides that were used in that talk can be viewed here.