This is a BFD! Banksters are indeed aptly named! Now they are caught red-handed in the cookie jar—public debt. These Banksters are using public debt as a cover to rob us blind, literally. There is an eerily similar echo to the subprime mortgages that collapsed the world economy in 2008. An immediate injunction on the payment of principal and interests of public debt! A reduction of debt level to remove the illegitimate debts. Let the Banksters take a haircut on public debt, as demanded in the past during the sovereign debt crisis of Greece and others. Better yet, do what Iceland did, unilaterally renegotiate the terms on all the loans. Banks are NOT in control. Banksters CAN be put in jails. Sovereign states MUST assert their prerogatives. ------------------------------- It is hard to think of an event that would transform social life as profoundly and rapidly as the emancipation of societies from the constraints of debt. And yet this is precisely what the French report aims to do. The audit is part of a wider movement of popular debt audits in more than 18 countries. Ecuador and Brazil have had theirs, the former at the initiative of Rafael Correas government, the latter organised by civil society. European social movements have also put in place debt audits, especially in countries harder hit by the sovereign debt crisis, such as Greece and Spain. In Tunisia, the post-revolutionary government declared the debt taken out during Ben Alis dictatorship an odious debt: one that served to enrich the clique in power, rather than improving the living conditions of the people. The report on French debt contains several key findings. Primarily, the rise in the states debt in the past decades cannot be explained by an increase in public spending. The neoliberal argument in favour of austerity policies claims that debt is due to unreasonable public spending levels; that societies in general, and popular classes in particular, live above their means. This is plain false. In the past 30 years, from 1978 to 2012 more precisely, French public spending has in fact decreased by two GDP points. What, then, explains the rise in public debt? First, a fall in the tax revenues of the state. Massive tax reductions for the wealthy and big corporations have been carried out since 1980. In line with the neoliberal mantra, the purpose of these reductions was to favour investment and employment. Well, unemployment is at its highest today, whereas tax revenues have decreased by five points of GDP. The second factor is the increase in interest rates, especially in the 1990s. This increase favoured creditors and speculators, to the detriment of debtors. Instead of borrowing on financial markets at prohibitive interest rates, had the state financed itself by appealing to household savings and banks, and borrowed at historically normal rates, the public debt would be inferior to current levels by 29 GDP points. Tax reductions for the wealthy and interest rates increases are political decisions. What the audit shows is that public deficits do not just grow naturally out of the normal course of social life. They are deliberately inflicted on society by the dominant classes, to legitimise austerity policies that will allow the transfer of value from the working classes to the wealthy ones. A stunning finding of the report is that no one actually knows who holds the French debt. To finance its debt, the French state, like any other state, issues bonds, which are bought by a set of authorised banks. These banks then sell the bonds on the global financial markets. Who owns these titles is one of the worlds best kept secrets. The state pays interests to the holders, so technically it could know who owns them. Yet a legally organised ignorance forbids the disclosure of the identity of the bond holders. This deliberate organisation of ignorance – agnotology – in neoliberal economies intentionally renders the state powerless, even when it could have the means to know and act. This is what permits tax evasion in its various forms – which last year cost about €50bn to European societies, and €17bn to France alone. Hence, the audit on the debt concludes, some 60% of the French public debt is illegitimate. An illegitimate debt is one that grew in the service of private interests, and not the wellbeing of the people. Therefore the French people have a right to demand a moratorium on the payment of the debt, and the cancellation of at least part of it. There is precedent for this: in 2008 Ecuador declared 70% of its debt illegitimate.
Posted on: Wed, 11 Jun 2014 11:41:25 +0000
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