Article 104 - MAASTRICHT - The scam of debt

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Re: Article 104 - MAASTRICHT - The debt scam




by Christophe » 19/01/18, 11:23

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Christophe
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Re: Article 104 - MAASTRICHT - The debt scam




by Christophe » 13/07/19, 01:59

The article is more than 1 year old but I don't see it going on until now:

"The debt, the debt, the debt!", This antisocial argument that is repeated to you is bogus

Here's why supporters of debt reduction through fiscal austerity are charlatans.


"Because the debt". This is the absolute argument of the supporters of anti-public service and anti-social protection policies.

First blade of the scissors: they use it to refuse any measure of social justice. For example, if you explain that a third of hospital staff is at risk of burnout (source: ANFH) and that it is therefore urgent to recruit more, they will answer you that it is impossible "because of the debt" .

Second blade: they use it to present their anti-social reforms as inevitable measures of sound management. For example, if you recall that social assistance is essential to limit poverty, since without it poverty would affect 24% of French people instead of 14% (Eurostat), they will tell you that they must nevertheless be reduced "because the debt ". So they try to enclose the political debate in an iron straitjacket: if you agree with them you are a virtuous manager; if you do not agree you are an irresponsible pierced basket.

This argument is, however, fallacious, for several reasons.

First, their way of counting state debt is absurd. "Debt of France at 98% of the GDP"! "Soon 100%"! In good faith, the non-specialist public will imagine that if we exceed 100% it is inevitably a disaster. He will therefore resign himself all the more easily to bleeding in our social spending. However, GDP is the total wealth produced by the country over 1 year; and the French State, currently, reimburses its lenders after a little over 7 years. Strictly speaking, if we compare our public debt to the country's GDP over 7 years, that gives 14%, and not 98%. The “debt apocalypse” balloon immediately deflates.

Then, it should be remembered that the ultimate guarantee of a State's debt is not the wealth produced by the entire country over 1 year. The ultimate guarantee is the existence or not of a total public wealth greater than the debt, because this means that the state holds more than it owes. This is also the fundamental reason why France, a country with a very large public heritage (infrastructure, real estate, public enterprises, etc.), is considered by lenders as a safe borrower, while poor states who have virtually no public assets are considered risky borrowers. The carelessness of the supporters of anti-social policies "because the debt" then comes to light: while it is in particular the existence of a powerful public heritage that makes France a solid borrower, the same people continue to weaken this guarantee by increasing the number of privatizations! This is the old story of the arsonist firefighter.

Last but not least, the idea that we can repay the public debt thanks to huge bloodletting in our public spending is in itself an idiocy. For example, if France managed, at the cost of unprecedented austerity, to generate a budget surplus of around 1% of GDP and spent it on paying down its public debt, it would take about ... 100 years! Who can seriously believe in such a scenario? This is enough to prove that the supporters of reimbursement through budgetary austerity are charlatans.

There is an alternative. The public debt of France, and more broadly that of the countries of the euro zone, can perfectly well be absorbed without anti-social austerity policies. All that is required is for the European Central Bank (ECB) to buy back the debts from lenders through monetary creation (the "printing press"); and that once redeemed, it erases them. This is legal, because the ECB already has the right to buy public debts from creditors: it has already done so in recent years. In a maximalist scenario, at the rate of monetary creation of 960 billion euros per year, all of the public debt of the euro zone could thus disappear in ten years, without suffering either the cut-up sale. of public assets, nor of bleeding in our social spending. As a reminder, the ECB has already created 2017 billion euros in 720 alone to support private banks: this order of magnitude is therefore not shocking. And anyway, we can also imagine an intermediate scenario, which would absorb a large part of the public debt of the euro zone but not all.

The usual big argument against this alternative is well known: "printing money will cause hyperinflation!". In reality, this is wrong. As long as it keeps controlled proportions, money creation does not cause hyperinflation: in this case, even the maximalist scenario that I am talking about would increase the money supply by only 4%, and at a fairly slow rate. In addition, in the economy as it is and not as we fantasize, what causes hyperinflation is the collapse of household and investor confidence in the country's economy, which results in the end of confidence in the value of the currency itself. For example, in the ever-invoked case of Weimar's wheelbarrows of German banknotes to buy bread, it was the collapse of collective confidence in the German economy that caused hyperinflation; and not a pre-existing policy of monetary creation.

Formerly Molière described the doctors of his time as charlatans hiding their ignorance behind obscure formulas in Latin, and who were only good at increasing the bleeding on the patients at the risk of killing them. Mutatis mutandis, the partisans of privatizations, anti-public service policies and anti-social protection policies are today's Molière doctors: they too justify deadly measures with pseudo-expert gibberish; and they too are dangerous charlatans.


Source: https://www.huffingtonpost.fr/thomas-gu ... _23473831/
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