RE: [OPE] capital's roads to recovery?[MESSAGE NOT SCANNED]

From: Paul Cockshott <>
Date: Wed Jan 21 2009 - 15:40:46 EST

David wrote

I think (1) can be addressed in several ways: Lowering the debt burden
of the agents in the economy; full or partial nationalizations of banks
and large firms saddled with debt; public borrowing and spending in
through social transfers and public works.

These are not ways of lowering the debt burden but ways of transfering it
to the taxpayer whilst protecting the interests of those to whom the banks
owe money.
I would advocate cancelling the debts either overtly or covertly.
Overtly one could simply legislate that debts to the banks were cancelled and
liabilities of the banks to depositors went no further than their holdings
of cash in hand or deposits with the state bank.
Covertly one could do the same in part by issueing large quantities of new
banknotes and so depreciating all existing debts.
The latter is the course that is more likely to be adopted. I think that
we should argue for the former.

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Received on Wed Jan 21 15:47:56 2009

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