The Debt Tragedy

This blog post was first published here on 22 January 2009.

As in most countries, here in Britain the credit crunch is continuing to cause havoc, and it’s now got to the point where the bigwigs are starting to blame each other for the debacle.

In the UK repossessions of domestic homes has risen by 92 per cent on a year ago, and on average one family is evicted every 10 minutes. Two and a half thousand jobs are lost every day. Those figures reveal a national disaster as well as a human tragedy every time a repossession or lay-off happens.

Financial Services Authority chairman Lord Turner announced that finance ministers around the world had failed to heed all the warning signals. We’ll gloss over the fact that Lord Turner himself also failed to issue any warnings, in spite of all the signals he claims to have seen, until it was too late.

Even the Queen is reported to have asked one of her ministers, “Why did nobody see it coming?”

Well, ma’am, with respect, some of us DID see it coming and did what we could to warn everyone. But nobody was interested.

How far will the downturn go? Everyone’s trying to estimate when the “recovery” will start and we can all get back to work and normal life. But if one thing is certain at the present time it is this - if a recovery does come it will be weighed down with even larger debts than we have already. It is the level of debt, more than anything, that prevents trade and industry - all the activities on which we all depend for prosperity - from providing the wealth that needs to filter down so all levels of society benefit.

How can anyone talk of a recovery without also mentioning the debt system that caused the crisis? The national debt of all leading countries, the debt level of all municipal authorities, the borrowing of companies and corporations, big and small, and individual levels of debt, even allowing for bankruptcies and debt write-offs, will all be at record levels. This will require payment of a larger and larger proportion of earnings as interest and repayment instalments to the banks. How can real wealth be created and shared equitably in this kind of economic environment?

This is a burden that will drag down and destroy our whole civilization. So the question is, will this happen now, or after the next cycle of boom and bust? And can we who know what is going on organise a sufficient level of opposition to this gigantic racket to bring it down before it destroys us all?

Start the opposition to this whole evil system by reading “Promise To Pay”, the classic work from Dr R. McNair Wilson, available without charge from our home page.

Spread the word.

Philip Gegan

 

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