Unfortunately for Christendom, I have to report that the falsehoods surrounding sovereign debt have manifestly penetrated the Vatican and have the Pope caught up in them.
From Francis' new release from earlier today:
Debt and the accumulation of interest also make it difficult for countries to realize the potential of their own economies and keep citizens from enjoying their real purchasing power.This is a POWERFUL untruth that we are wrestling with.
3 comments:
True for the EZ, however, where governments are essentially currency users rather than currency issuers like the US, UK, Canada, Australia, Japan, etc. We really need to make the point that currency regimes matter.
Even Paul Krugman whose specialty is trade admits that he did not realize this until recently.
...that currency regimes matter
Right - this is likely the key point of contemporary politics.
That one of the most realistic of mainstream economists (the rest of the pack is incomparably worse) can make such a confession of ignorance without the world coming down in laughter tells us a lot about the depth of our predicament.
Imagine a Nobel winning physicist saying he didn't understand how gravity works "until recently". We can bet the reactions would be very different.
The Keynes dictum that economists should be seen by the public as no less reliable than dentists is still - sadly - a long way off.
Matt, your criticism is way off here, imo. What Francis wrote is true not only for the EMU but for any country with (1) a significant amount of externally denominated and/or "hard currency" debt or (2) an economy that is small with any meaningful degree of openness (most if not all?). What you wrote here applies only to a tiny handful of govts (to whom Francis would assign serious responsibility for the rest of the world, I suspect.)
BTW, the passage screams, "Occupy Vatican." :) Thanks for linking to it.
"56. While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few. This imbalance is the result of ideologies which defend the absolute autonomy of the marketplace and financial speculation. Consequently, they reject the right of states, charged with vigilance for the common good, to exercise any form of control. A new tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules. Debt and the accumulation of interest also make it difficult for countries to realize the potential of their own economies and keep citizens from enjoying their real purchasing power. To all this we can add widespread corruption and self-serving tax evasion, which have taken on worldwide dimensions. The thirst for power and possessions knows no limits. In this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which become the only rule."
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