Zero Hedge — Canceling Debt And The Debate Over 5,000 Year Old Economic Policy

Michael Hudson filtering up.

Zero Hedge
Canceling Debt And The Debate Over 5,000 Year Old Economic Policy
Tyler Durden

The Key to a Sustainable Economy Is 5,000 Years Old — Ellen Brown

Ellen Brown summarizes Michael Hudson 's ..and forgive them their debts: Lending, Foreclosure and Redemption From Bronze Age Finance to the Jubilee Year (THE TYRANNY OF DEBT Book 1).

Truthdig
The Key to a Sustainable Economy Is 5,000 Years Old

Ellen Brown

Michael Hudson— The Coming Savings Meltdown

Debts that can’t be paid, won’t be. That point inevitably arrives on the liabilities side of the economy’s balance sheet.

But what of the asset side? One person’s debt is a creditor’s claim for payment. This is defined as “savings,” even though banks simply create credit endogenously on their own computers without needing any prior savings. When debts can’t be paid and debtors default, what happens to these creditors? 

Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
The Coming Savings Meltdown
Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University

Stephanie Kelton On Student Debt Forgiveness & The Fundamentals Of Modern Monetary Theory Richard Eskow

Podcast. No transcript.

The Zero Houor
Stephanie Kelton On Student Debt Forgiveness & The Fundamentals Of Modern Monetary Theory
Richard Eskow

Michael Hudson — FT: Wiping the slate clean: is it time to reconsider debt forgiveness?

I don't link to FT since it is behind a paywall (although FT Alphaville is not, but free registration may be required). Michael Hudson provides access to a recent article by Gillian Tett on debt forgiveness.

Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
FT: Wiping the slate clean: is it time to reconsider debt forgiveness?
Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University

Michael Hudson — Mutual Aid vs Moral Hazard

Creditors argue, for instance, that if you forgive debts for a class of debtors – say, student loans – that there will be some “free riders.” Students freed from debt will benefit, while students who were able to carry and pay off their debts had to “meet their obligations.” It is further argued that if student debts are forgiven (or “junk mortgage” loans written down to fair real estate valuations), people will expect to have bad loans written off. This is called a “moral hazard,” as if debt writedowns are a hazard to the economy, and hence, immoral.

This is a typical example of Orwellian doublespeak engineered by public relations factotums for bondholders and banks. The real hazard to every economy is the tendency for debts to grow beyond the ability of debtors to pay. If large numbers of students remain liable to pay student loans without having obtained well enough jobs to pay, this will prevent them from being able to qualify for mortgage to buy a home and start a family. Many students today are obliged to keep living with their parents, and are unable to marry. The result is deepening economic austerity as a result of the debt overhead.

Meanwhile, defaults on student loans to for-profit colleges are projected as rising toward 40%. Is it worth it to say that to prevent giving these impecunious students a “free lunch,” it is worth keeping a large swath of the population poor and unmarried?....

The basic moral financial principal should be that creditors should bear the hazard for making bad loans that the debtor couldn’t pay — like the IMF loans to Argentina and Greece. The moral hazard is their putting creditor demands over the economy’s survival.

Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism

Mutual Aid vs Moral Hazard
Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University

John Siman — Everything You Thought You Knew About Western Civilization Is Wrong: A Review of Michael Hudson’s New Book, And Forgive Them Their Debts

Must-read.

Naked Capitalism
Everything You Thought You Knew About Western Civilization Is Wrong: A Review of Michael Hudson’s New Book, And Forgive Them Their Debts

John Siman

Michael Hudson – Charles Goodhart — Could/Should Jubilee Debt Cancellations be Reintroduced Today?

Michael Hudson and Charles Goodhart team up.

Longish and detailed but an easy read.

Counterpunch
Could/Should Jubilee Debt Cancellations be Reintroduced Today?
Michael Hudson – Charles Goodhart

also

Irrespective of what we may think of Syria, this is little but a full-scale assault on international law and the normative system embedded in the UN Charter that has taken decades of hard work to build, a fundamental cornerstone of the management and civilizational development of the world order system.

Seen in comparison with the other attempts at undermining the UN – which began in the 1990s in Bosnia-Herzegovina – this should be a cause of deep concern among people in the truly civilizational corners of our world.

And it can’t be sold to the world under the headline of a Responsibility to Protect.…

Naked power grab.

The New US Syria “Strategy”, a Recipe For Continued Disaster
Jan Oberg

Bill Mitchell — Another Eurozone plan or two that skate around the edges

There was an article in UK Guardian last week (September 26, 2014) – Debt forgiveness could ease eurozone woes – which was interesting and showed how far the debate has come. The outgoing European Commissioner for Employment, Social Affairs and Inclusion, László Andor also gave a speech in Vienna yesterday – Basic European unemployment insurance: Countering divergences within the Economic and Monetary Union – which continued the theme from a different angle. While all these proposals will be positive rather than negative they essentially are not sufficient to solve the major shortcoming of the Eurozone – its design will always lead it to fail as a monetary system because they have not accepted that all citizens in each country have equal rights to avoid economic vulnerability in the face of asymmetric aggregate spending changes. That lack of acceptance means the political leaders will never create an effective federal fiscal capacity and the member nations will always be vulnerable to major recessions and wage deflation, which undermine living standards. 

I have received E-mails recently and there have been some comments posted in relation to some blogs I have written on the Eurozone which say essentially that I unfairly bracket those who propose solutions to retain the euro but ameliorate the consequences of that retention as being either explicit or implicit supporters of the common currency.
Various justifications are used for arguing within the neo-liberal ‘tent’ for ad hoc solutions, which retain the euro and the fiscal constraints that are associated with it, including – political difficulties in challenging the very existence of the euro, unfairness to international creditors and financiers if the euro is abandoned by any particular nation, increased cross-border transaction costs, and other claims. 

All of which have elements of truth. But a progressive position that argues from within the mainstream ‘tent’ inevitably becomes captured by the essential elements of the mainstream view even if the underlying ideology is rejected.…

Bill Mitchell – billy blog
Another Eurozone plan or two that skate around the edges
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia

Kenneth Rogoff — Europe’s Lost Keynesians

Rogoff calls for debt writedowns.

Project Syndicate
Europe’s Lost Keynesians
Kenneth Rogoff, Professor of Economics and Public Policy at Harvard University

Stephen Roach — America’s Strategy Vacuum

As the quintessential laissez-faire system, the US outsources strategy to the invisible hand of the market, with the government locked into a reactive approach to unexpected problems. Thus, both monetary and fiscal policy have been focused on cleaning up after a crisis rather than on how to avoid another one.

Project Syndicate
America’s Strategy Vacuum
Stephen S. Roach | formerly Chairman of Morgan Stanley Asia and the firm's Chief Economist, and currently a senior fellow at Yale University’s Jackson Institute of Global Affairs and a senior lecturer at Yale’s School of Management