#public debt

[dontmean2bepoliticalbut]

[pharosproject]

The "legacy" of Nancy Pelosi

[workersolidarity]

🇺🇳🇺🇲 TOTAL GLOBAL DEBT WAS US$92 TRILLION AS OF 2022

TOTAL US PUBLIC DEBT IN 2022 WAS $31 TRILLION

MEANING THE UNITED STATES IS RESPONSIBLE FOR JUST A HAIR OVER ONE THIRD OF GLOBAL PUBLIC DEBT.

Understand that no other country on earth can print money and just spend it the way the United States does because the rest of the world doesn't have sovereignty over the World Reserve Currency.

If any other country attempted to print money and manipulate markets the way the United States does, first off we'd sanction them for having an independent policy, and secondly, it would rapidly result in runaway inflation.

But because the US has sovereignty over the World's Reserve Currency, the United States can and does manipulate markets and print money however it likes, and the rest of the world, especially in the Global South, are literally forced to subsidize this US debt by buying US dollars at horrible exchange rates that favor Western countries in order to do trade, oftentimes with countries that have NOTHING to do with the United States because that's just how the international system has been designed (by the US and UK) to force countries to trade in dollars using Western banks.

And this advantage is baked into the system itself.

This means foreign countries in the Global South are subsidizing the very Imperialism oppressing them, subsidizing the 900 or so US military bases around the world.

@WorkerSolidarityNews

[o-kurwa]

[the-funtime-autocrat]

The budget should be balanced, the treasury should be refilled, the public debt should be reduced and the arrogance of public officials should be controlled.

Ross Perot (1930-2019), Billionaire and Presidential Candidate (1992 and 96).

[oupacademic]

What Everyone Needs to Know Q&A: In recent months, Puerto Rico’s colossal public debt has sparked an economic crisis that has catapulted it onto the national stage. As the Island’s attempts to slash its massive debts take on even greater urgency after Hurricane Maria, we want to know:

What factors led to the Island’s public debt crisis?

Puerto Rico’s sustained economic deterioration since 2006 has been associated with a spiraling cycle of public debt. The Commonwealth accumulated fiscal deficits as it continued to borrow money by issuing municipal bonds, to pay public employees and maintain public services. Instead of restructuring its economy after the demise of Section 936, the insular government more than doubled its debt from $17.6 billion in 1996 to almost $40 billion in 2006. The debt nearly doubled again to over $72 billion in 2015. Much of the Island’s debt stems from public corporations such as the electrical power authority, the government development bank, the transportation authority, and the water and sewage authority. The Commonwealth government has taken austerity measures to reduce public spending and increase state revenues—such as laying off thirty thousand public employees in 2009 and cutting back state contributions to public pension systems. But such measures have been insufficient to straighten the Island’s finances. In 2014, the three main credit rating agencies (Fitch, Moody’s, and Standard and Poor) downgraded the Commonwealth’s bonds to junk status.

On 28 June 2015, Governor Alejandro García Padilla (b. 1971) declared that “the debt is not payable.” Because Puerto Rico is not a state of the American union, it does not qualify for federal bankruptcy; because it is not a sovereign country, it cannot apply for emergency financial assistance from multilateral organizations such as the International Monetary Fund. In May 2016, the Commonwealth government declared a fiscal state of emergency and a moratorium on its public debt obligations. In July 2016, the Commonwealth government defaulted on nearly one billion dollars in debt payments.

[Page 101-102, Puerto Rico: What Everyone Needs to Know by Jorge Duany]

Image: IMG_8341 by Breezy Baldwin. CC BY 2.0 via Flickr.

[conza]

Public Debt Repudiation

“I propose, then, a seemingly drastic but actually far less destructive way of paying off the public debt at a single blow: outright debt repudiation. Consider this question: why should the poor, battered citizens of Russia or Poland or the other ex-Communist countries be bound by the debts contracted by their former Communist masters? In the Communist situation, the injustice is clear: that citizens struggling for freedom and for a free-market economy should be taxed to pay for debts contracted by the monstrous former ruling class. But this injustice only differs by degree from “normal” public debt.

For, conversely, why should the Communist government of the Soviet Union have been bound by debts contracted by the Czarist government they hated and overthrew? And why should we, struggling American citizens of today, be bound by debts created by a past ruling elite who contracted these debts at our expense? One of the cogent arguments against paying blacks “reparations” for past slavery is that we, the living, were not slaveholders. Similarly, we the living did not contract for either the past or the present debts incurred by the politicians and bureaucrats in Washington. [...]

Apart from the moral, or sanctity-of-contract argument against repudiation that we have already discussed, the standard economic argument is that such repudiation is disastrous, because who, in his right mind, would lend again to a repudiating government? But the effective counterargument has rarely been considered: why should more private capital be poured down government rat holes? It is precisely the drying up of future public credit that constitutes one of the main arguments for repudiation, for it means beneficially drying up a major channel for the wasteful destruction of the savings of the public. What we want is abundant savings and investment in private enterprises, and a lean, austere, low-budget, minimal government. The people and the economy can only wax fat and prosperous when their government is starved and puny. [...]

Canceling federal agency-held bonds, then, reduces the federal debt by 40 percent. I would advocate going on to repudiate the entire debt outright, and let the chips fall where they may. The glorious result would be an immediate drop of $200 billion in federal expenditures, with at least the fighting chance of an equivalent cut in taxes.

But if this scheme is considered too draconian, why not treat the federal government as any private bankrupt is treated (forgetting about Chapter 11)? The government is an organization, so why not liquidate the assets of that organization and pay the creditors (the government bondholders) a pro-rata share of those assets?

This solution would cost the taxpayer nothing, and, once again, relieve him of $200 billion in annual interest payments. The United States government should be forced to disgorge its assets, sell them at auction, and then pay off the creditors accordingly. What government assets? There are a great deal of assets, from TVA to the national lands to various structures such as the Post Office. The massive CIA headquarters at Langley, Virginia, should raise a pretty penny for enough condominium housing for the entire work force inside the Beltway. Perhaps we could eject the United Nations from the United States, reclaim the land and buildings, and sell them for luxury housing for the East Side gliterati. Another serendipity out of this process would be a massive privatization of the socialized land of the western United States and of the rest of America as well. This combination of repudiation and privatization would go a long way to reducing the tax burden, establishing fiscal soundness, and desocializing the United States.

In order to go this route, however, we first have to rid ourselves of the fallacious mindset that conflates public and private, and that treats government debt as if it were a productive contract between two legitimate property owners.“

           — Murray Rothbard, Repudiate the National Debt

[the-funtime-autocrat]

Will you tell me why a government with power to create money, should give that power away to a private monopoly, and then borrow that which parliament can create itself, back at interest, to the point of national bankruptcy?

Graham Towers (1897-1975). First Governor of the Bank of Canada (1934-1955) when speaking before the Canadian Government's Standing Committee on Banking and Commerce in 1939.