But the debt ceiling debate was on the fringes of my mind, and I thought for how long can we go on celebrating like this until our government slowly takes away public programs and government jobs and maybe even collapses altogether? I told Phil, wouldn't it be easy if the U.S. could just declare bankrupt like individuals and just start all over with a clean slate? I mean is that possible? What would the ramifications be..? One of my favorite blogs Our Finite World lays down nicely the possible options with scenarios in which governments can deal with debt. Here are the first three which we hear about often option 2 more than any of them: (1) inflate your way out of the problem, (2) cut programs and/or raise taxes, and (3) restructure debt, perhaps delaying repayment and giving bondholders a “haircut” on promised payouts. While we continue to hear about the first three options in the press/maelstrom of Republican vs. Democrat redundant squawks and finger pointing, no one is talking about options four and five.
Option four is my thought on what if the government could just go bankrupt and our debt forgiven, "A debt “jubilee”." As the author describes, the problem with this would be the "assets underlying some of the debt, and the question will be, which of the several possible claimants should get the underlying asset." Senator Ron Paul has a similiar minded solution in which the U.S. Treasury could just ask the Federal Reserve to rip up 1 Trillion of debt. Of course that has ramifications as well one being the Fed uses the interest on the debt owed by the U.S. Treasury to fund some of its operations like the Consumer Protection Bureau. And other ramifications like well it just looks bad, like we can't live up to our obligations. The author of the Times blog seems to see it as a good idea, admitting that it's only short term to keep government services running for another year before we are in the same situation, and that "It's definitely better than defaulting. And it is probably better than massive cutbacks in government spending that could potentially send us right back into a recession anyway."
That brings us to Option 5 - "looks like the easy way out. Just give up, and let a new government come in, and start with new programs and a blank slate. Or a revolution or civil war might produce this same result."
Which to me would be the result of Option 4 and possibly the cue for the Venus Project to introduce it's resource based economy proposal on a mass scale. History has shown us that governments are capable of collapsing, remember the Soviet Union and as the Finite World author cites, the breakups of Czechoslovak Socialist Republic and Socialist Republic of Yugoslavia. If you read for a few minutes the proposals of the Venus Project, it actually makes sense. What if money were out of the picture, and everyone was pursuing what really made them happy and contributed their resource for the greater good of our earth and humanity? Why is that so crazy?Lets go back in history and to Noam Chomsky and his reminder of the economic system as part of the "New Deal" that happened after World War II called the Bretton Woods system. He says, "The Great Depression and the war aroused radical democratic currents, taking many forms, from the antifascist resistance to working-class organization. These pressures made it possible and from a different point of view, necessary - to permit social democratic policies." The Bretton Woods established "the right of government to restrict capital movement. In dramatic contrast, in the neoliberal phase that followed, the U.S. Treasury Department now regards free capital mobility as a 'fundamental right'." Isn't the Fed buying up U.S. Treasury bonds a great example of how the U.S. moves capital to cover its ass as it pleases?
The finite world blogger offers a great step that would improve current conditions that are parallel to an idea of stimulating job growth - inflate salaries. This means not just CEO salaries. "If salaries are inflating and enough people are working, then business revenues and government revenues will inflate as well, so that repaying debt plus interest won’t be too terrible a task. At this point, there is not even a hint that salaries are inflating, and that the unemployment problem has been solved."
While we hear about how our president and government should be doing something about the unemployment rate until our ears bleed, and a few friends or acquaintances continue to job hunt, these are just some possibilities to think about. And if you are the working-class and are working to organize to improve our financial situation for a more transparent credit market, or any social situations, more power to you.
This music album by Actraiser 'The Art of Balance' certainly promotes balance with its diverse genre offerings and smooth production so I thought I'd highlight it and the theme of Balance. I wrote the album review and starting today it is now available on Cold Busted, check it out at the free listening booth, it's very fitting for summer weather or anytime.
