[OPE] The new debt scare

"With the world's governments now owing a collective $35tn (£21tn) and
counting, the Economist has devised an innovative way of getting to grips
with the eye-wateringly high mountain of public debt. Called the Global
Public Debt Clock, the online guide keeps a running total of the current
global public debt - updating every few seconds. There is also an
interactive map that allows users see which countries are particularly laden
with debt - America, the UK, most of continental Europe - and which are less
dependent on borrowing to balance the books - India, China, much of Africa."
http://www.guardian.co.uk/business/2009/sep/17/economist-global-debt-clock

After the government bailed out the banks, there is now a new propaganda
effort in the making - to convince the public that the state has no more
money to spend on its own citizens, because they spent it all on fighting
the crisis.

Of special interest here is the completely fraudulent misrepresentation of
"who owes how much money to whom, over what terms, on the strength of what
amount of assets". For example, a gross debt figure is touted, and then it
is compared to annual GDP, and that seems large, since GDP measures the
whole economy, right? Wrong, but anyhow it is meaningless to understand debt
proportions in this way. Debts have to be compared to assets, and you have
to relate the amount of debt service to income in the same interval, and
that's just for starters.

But governments are very reluctant to reveal what assets there are, and who
owns them. If they did that, it would become obvious that the bulk of the
planet is legally owned by a few tens of millions of people (less than half
a percent of the world population), and that debt is the"biggest business in
town", the primary means of extracting income and wealth from human labour.

So we can anticipate that economists and politicians will be talking a lot
of rubbish and "snow jobs" about the meaning of indebtedness.

Jurriaan

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Received on Mon Sep 21 15:27:41 2009