'Another Great Depression is all but inevitable' -'Write off the debt'

[Huey P. Long]

Run time: 00:00 https://www.youtube.com/watch?v=rGkmgnprrIU   Posted on YouTube: November 25, 2011 By YouTube Member: capitaldamagecom Views on YouTube: 705   Posted on DU: November 27, 2011 By DU Member: Huey P. Long Views on DU: 8574

 
Sarah Montague talks to Steve Keen, one of the few economists to have predicted the global financial crisis, about the possibility of another Great Depression, and how to avoid it.

'Another Great Depression is all but inevitable' - that's the view of Steve Keen. He's been called the 'Merchant of Gloom', but he's one of the few economists to have predicted the global financial crisis. While he used to be a lone voice in challenging the economic consensus, more and more people are now listening to him. His way of avoiding depression? Write off the debt, bankrupt the banks, nationalise the financial system, and start all over again. He talks to Sarah Montague.

==

Steve Keen On Parasitic Bankers, Deluded Economists, and Why “We Are Already In The Second Great Depression”
Submitted by Tyler Durden on 11/27/2011 12:20 -0500


Everything that 'deluded' orthodox economists have done so far has been designed to aid the creditors (who remain the problem) while Steve Keen, the most familiar face of the non-orthodox economists, sees the only solution to this crisis as aiding the debtors. His interview with BBC’s HardTalk this week covers a great deal of ground from modern debt jubilees (and how they should be structured), the Tea-Party and Occupy movements (and his growing fear of historically repeating the endgames of previous economic and social disenfranchisements), and the parasitic nature of our existing financial sector.

He is unequivocal on the outcome of the status quo, as he has been for many years, citing politicians as reactors not leaders with the view that the youth movements we are seeing will force change of leadership to enable non-orthodox solutions to our simple problem – too much private debt. “Write off the private debts, nationalize the banking system, and start all over again” is his starting point but his ideas on implementation warrant some attention as he attempts to promote creative instability and reduce the destructive instabilities of capitalism – recognizing that our world is not in equilibrium as every Keynesian economist would believe but inherently cyclical and unstable.

--
http://www.zerohedge.com/news/steve-keen-parasitic-bankers-deluded-economists-and-why-“we-are-already-second-great-depression

[cutlassmama]

1. parasitic bankers is right

[penguin7]

2. So The Chump That Rents Gets To Pay For

The half million dollar house that the other guy overpaid to buy.

[aletier_v]

4. that is the inevitable nature of pyramid schemes

The question is not whether you'll have to write off your past efforts.

The question is if you will continue writing off your current efforts.

[spooked911]

16. no, it wouldn't work that way

the idea is to make the bankers pay

[fasttense]

26. No, you don't understand, the money is already spent on banksters

Right now the chump that rents gets to pay for each and every bank CEO's house.

What he is saying that instead of continually bailing out banks, (we are still loaning them money at .25% and they are still not loaning it out) we bail out individuals who have to use the money to pay off their debt. Then the banks get their loans paid off and the renter gets a better job because we are out of a depression.

Besides even renters have some amount of debt - credit card, car loans. They would get money to pay off their loans too.

The only person who would see no improvement from this plan would be ...well, bankers and Wall Street speculators but then they would profit from the better economy.

[Huey P. Long]

27. The poster exhibits the metaphor of the crab in the hamper.

[freshwest]

3. 'But what wilburforce can bring this to pass?' Maybe an OWS party but remember that..

William Wilburforce spent 26 years of his life working to outlaw the slave trade in lands under British rule. The same banking families that were in place then, are still with us, but were 'put in their place' to end it, by the will of the people of Britain.

But to 'Write off the debt, bankrupt the banks, nationalise the financial system, and start all over again,' could just encourage the fascists who are dismantling the beneficial aspects of the system as it exists now. There is something inherently wrong with debt and paper money, but it has also allowed a great deal of what people thought they wanted and needed. It has not all been frivolous.

As far as the solution offered in the OP, was this not done in Italy and other countries before WW2? Did it guarantee prosperity, peace and justice, taking care of all. I appreciate the OP, but really, the language and actions of the market is not, and should not be, the way to run government. Just my opinion, not a financial whiz.

[MannyGoldstein]

5. Well worth the 25 minutes - highly recommended

I believe that Keen is correct.

[Tanelorn]

12. He is Australian you know.

It seems sad to take pride in a gent that has such gloomy
news.

 I looked up the principle of the Jubilee Year. A Catholic
(and Jewish) Church forgiveness of sins and DEBT every 50
years. Sounds great to me.

[Mojorabbit]

6. The interviewer was just on this side of disrespectful of her guest. nt

[SteveM]

8. Treated like Noam Chomsky: Interviewers START with an insult. nt

[The Wizard]

7. Does this explain

the gestapo tactics our militarized police are using. We're being conditioned for a garrison state.

[MarkCharles]

9. Love your screen name, love your post here. Teen was telling the truth.

And now faces punishment for doing so?

Way to make a radical teen out of a smart one!

[MarkCharles]

10. Thanks for posting this! I love the Chris Hayes' UP show... as good as Rachel's show

and unfortunately on TV when so few are watching.

Yes, I saw Johnson on there today. He's a wise man! So are Chris and Ezra Klein, and the women who were there too.

[Dj13Francis]

11. Yup.

That's what i've been saying since 1996... Even though it blows, I gotta admit it does feel pretty good to be right.

[Dumpster Macaine]

13. Aiding The Debtor's

When Ms. Montague countered that aiding debtors, people who took out loans on homes and business', was, like Pres. Obama formulated, "rewarding bad behavior", I was disappointed Mr. Keen didn't turn it around and say bailing out banks "too big to fail" would have the same effect, encouraging bad behavior on their part in the future too.

..Why not give the money to people to pay down their debt and jump start the economy, instead of to banks to sit on, too afraid to lend "because they already lent too much". Either the White House + Co. are stupid, or this was all just a big rip-off.

I thought Mr. Keen was misleading on another point, implying depression era conditions led the German people to elect Hitler. Although the bad economy certainly helped the Nazi agenda in the 30's, it did not get them into power. The last free German election, in Nov. 1932, saw the Nazi's lose 5% of their votes and many seats in Parliament. After the Strasser brothers abandoned the party, taking many members with them, and financially bankrupt, shortly after the Nazi Party was finished. Only because of backroom maneuvering by Franz von Papen (Catholic Party leader) and Kurt von Schroeder (Int. Banker and Industrialist, see meeting January 4 1933) were they finally able to convince President Hindenburg to name Hitler Vice Chancellor (with von Papen) at the end of January.

Mr. Keen is right to warn us, it could happen again here. But like Germany it should be remembered it won't be by the people, rather by elite circles out to protect their own asses, and at all costs.

[chervilant]

14. Actually,

The obscenely wealthy corporate megalomaniacs are scurrying around like cockroaches in the dawning light because their wealth is an illusion. Their hedonism has resulted in the massive Black Hole that the brave and erudite Brooksley Born called the Dark Market. With a current notional value of $680 TRILLION, the 'worth' of these worthless financial instruments exceeds the combined GNPs of EVERY NATION ON THIS PLANET by a factor of ten.

The entire system IS broken, and the banks ARE parasites. Time for change, and I am ever more hopeful, now that #Occupy is spreading across the globe.

[blackspade]

15. Very interesting discussion.

[zipplewrath]

17. It isn't "debtors and debt holders" anymore

Many of us, if not most, are both. We both owe money, and are invested in those same debt instruments and markets. Intentionally collapsing the system would hurt everyone across the board. Pension plans could be decimated. Savings could disappear. And the impact on jobs could be substantial.

There is little doubt that debt holders are going to have to accept that they aren't going to get the returns they had anticipated. Zeroing out whole debts on the other hand may be the reverse extreme.

[tsuki]

18. Good debate. The What-About-Me vs. The What-About-Us. nt

[Dumpster Macaine]

19. Thank God Communism Works

Thank God Communism works (China), if they didn't buy up our enormous debt we'd have been screwed a long time ago.

Still, if we prohibited predatory capital, I believe we could still save ourselves. How can a system work when so much money is allowed to be wagered on it's failure. Why give speculators the incentive to let it fail? This is insanity, not capitalism.

[Huey P. Long]

20. Essay-

Unleashing The Future: Advancing Prosperity Through Debt Forgiveness
11/28/2011
Submitted by Zeus Yiamouyiannis, contributor to Of Two Minds

Unleashing The Future: Advancing Prosperity Through Debt Forgiveness (Part 1)

Introduction:

My last article on debt forgiveness, Endgame: When Debt is Fraud, Debt Forgiveness is the Last and Only Remedy must have struck quite a chord in discussions of the future of the economy. It was re-posted on scores of websites and received over 20,000 reads on Zero Hedge. It also resulted in a reference on the Max Keiser Report and a subsequent interview with Max Keiser. This led in turn to a popularization of a term I used, “fake assets,” to denote the true nature of “toxic assets”.

The good news is that people are talking, attempting to assess the situation in real terms, and looking for an alternative to the broken system. The bad news is that this discussion has not been turned very much toward practical directions. The main contention in my original article on debt forgiveness and subsequent interview was simply that ignoring the mathematics of debt (where debt grows exponentially and real growth is limited), especially when magnified by tens, if not hundreds, of trillions of dollars of additional fraudulent debt, is a dangerous fantasy that worsens insolvency and accelerates collapse. “Extend and pretend” cannot provide an answer but can only amplify current destructive trends and delay serious preparation of an alternative.

This series outlines some of the alternatives to the current impasse.
--
1) Debt that cannot (vs. “will not”) be practically paid is not a debt in its classical sense.

2) Debt based in fraudulent lending is also not true debt in any meaningful sense, since the loan along with its obligations originated from something (private fiat) that had no valid authority or exchange value to begin with.

3) When debt systems are flooded with fraudulent currencies and claims, it is not true that someone, either the borrower or lender, will have to pay the “false value”-backed debt.

4) The mathematics of debt, even without fraud, would require periodic forgiveness or at least abatement.

5) In any rearrangement of the debt system, productivity and stakeholdership should be rewarded and parasitism should be punished.

6) Things go down and not always up.

7) The living shall not be beholden to the dead.

--

Certainly, we now see scorched-earth class warfare of the 1% against everyone else, but we are ignoring an even more profound unintended warfare by an entire generation of post-WWII world citizens against the wellness and interests of its own children. How could such a destructive myopia so thoroughly pervade society and bring us this critical historical inflection point? This will be examined in the next part.


--
http://www.zerohedge.com/news/guest-post-unleashing-future-advancing-prosperity-through-debt-forgiveness-part-1

[fascisthunter]

22. Your last paragraph sort of asks the same question I was asking

in another thread. I look forward to the second part and what others think.

[fascisthunter]

21. and there it tis!

[katty]

23. been saying write off debt since mid 00's-just do it

[Huey P. Long]

24. I am heartened that this has gotten many rec's.

[izquierdista]

25. Painful

Sarah is a stump. I kept waiting for Keen to pull out the hand puppets to help him explain it to her.

[Octafish]

28. Kick for light.

Wish I'd seen sooner. Thank you, Huey P. Long!

[ljm2002]

29. Excellent discussion...

...and he does seem to have thought a bit about how you could implement debt forgiveness in a modern system.

K&R