Ruminations of a Rundown Replicant

Modern Debt Jubilee

This is the audio [mp3] of a discussion between heterodox economists, Michael Hudson, Steve Keen and Pavlina Tcherneva. The moderator is activist, Astra Taylor.

They titled it, The Great Debt Debate Q&A.

It should make sense to avid readers if I have any of those.

For those of you who like a little colour with their dire messages, here is Astra Taylor's, Your Debt is Someone Else's Asset [mp4].

Obviously, the US hasn't benefitted from socialised health and education. Ours is being slowly destroyed by neoliberalism.

I wrote here about a debt jubilee .

This next section covers Steve Keen's modern debt jubilee, a debt write-off with everyone treated the same.

Using the power of government to create money out of thin air, everyone receives the same amount of money, on the understanding that, if they have debt, the money is used to repay that debt.

The accounting is:

Debit government (say) $100,000 (an accounting balance)

Credit savings account $100,000 (new money)

If there's no debt to be repaid, the prudent saver is rewarded with a $100,000 gift.

If debt is repaid, money is destroyed by the bank.

Debit savings account $100,000

Credit bank loan $100,000 (money effectively destroyed)

The amount of money in circulation is unchanged.

Purchasing power is improved for all but increased spending is more likely at the bottom end, and that's good for the real goods and services economy.

The top end may boost asset prices or they might just let the extra languish in bonds. But, they might also increase business investment if opportunities emerge as a result of greater consumer spending.

In the end, it's a simple proposition.

Static or declining incomes can't absorb increasing rentier imposts (e.g. compound interest debt) and dense energy prices.

Rentiers could take their feet off creditor throats, but they won't.

Creditors have to pay whatever it takes to keep the energy producers in business. Nothing can be done about that.

The quality of energy is going down, the cost is going up and it's coming to an end.

Perhaps, I should repeat that.

The big burn is coming to an end.

How can anyone predict climate change, when they're modelling energy BAU?

- 1 toast