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It's easy to solve the debt crisis. Just cancel the debts. The issue these countries have is they lost their sovereignty by getting into debt in a currency they
by mempko 3y ago
It's easy to solve the debt crisis. Just cancel the debts. The issue these countries have is they lost their sovereignty by getting into debt in a currency they don't control. Going into debt in a foreign currency means you lose sovereignty. Better issue more money in your own currency and risk inflation instead of lose sovereignty.
Because the most important thing for a state is to make sure it does what it promises to. As soon as you let the IMF in, they will force you to break promises and gut public spending. This weakens the country and makes it easier to exploit.
Debts just need to be cancelled. It's all accounting in the end.
- unyttigfjelltol 3y agoSo cancel dollars? Or is that debt ok because it's an "IOU nothing"? Everything comes back to flows, and debt is simply a symptom of a political system unwilling or unable to balance their books. If you start "cancelling" debt, first of all you just cancelled the Federal Reserve so you cancelled yourself. Second of all, you just stole a bunch of money from a bunch of people some of whom may have a standing army ready to ask for it back. Third, you just required yourself to do the budget-balancing you refused or were unwilling to do that got you in this mess in the first place-- because no one will lend to you ever again. Fourth, where does the cancelling end? Social Security? Medicare? Government pensions? No, "just cancel the debts" is not a solution.
- hasty_pudding 3y agoJust tell everyone who bought treasury bills they wont be getting their money back? Not so sure that's a great idea
- mempko 3y agoThe article is about poor countries and their sovereign debt denominated in dollars. That's the debt that needs to be cancelled. In my opinion, all private debt would be good to cancel too. I'm not suggesting the treasury doesn't pay back their debts.
- qwytw 3y ago> Debts just need to be cancelled. It's AFAIK that's unconstitutional in the US at least.
- toast0 3y agoWhich part of the US Constitution does cancelling Argentine debts fall afoul of? Cancelling US debt without consent of the lenders would likely be unconstitutional, but the article seemed to be discussing IMF loans, and I don't think the US has taken any of those.
- pdonis 3y agoThe US doesn't need to cancel any debts that are denominated in dollars--which means all of the debt that is causing all the ruckus. The US can print dollars. That amounts to devaluing the debt, i.e., it favors debtors at the expense of creditors. Historically, that is exactly how the US has dealt with its debt once it went off the gold standard and dollars were purely fiat money.
- hackeraccount 3y agoYou understand that's not a magic fix right? If I loan you $20 and a day later you let me know it won't be paid back what will I do? Retrospectively nothing. The money's gone and I'm not getting it back. Prospectively? I'm either not lending you $20 again or I'm changing the terms of any future loan to better take care of myself. Read David Graeber’s book - it's a great chance to think through the possibilities and nature of debt. Mind that Graeber himself does none of that so it's a bit on the reader.
- mempko 3y agoIf you had read David Graeber's book on debt, you would have known that he literally suggests the same thing, to cancel debts. A debt jubilee.
- hackeraccount 3y agoGraeber suggested that a jubilee was an answer the problem of debt. Debt isn't a problem - at worst it's a symptom and more often it's a utility.
- Ekaros 3y agoIssue with cancelling debt is that after you do that you won't get more debt. And if your system of spending is setup on what is essentially revolving credit it will very quickly mean you have no money to spend on anything.
- mempko 3y agoStrange, history is littered with debt cancellations and yet here we are. A debt jubilee is like hitting the reset button. The modern financial system will still create debt as it must!