Debt Rattle May 15 2016

Hi Ilargi,
I simply can’t square the idea that Keen is a good guy when he defends complete absurdities in order to defend the root cause of the problem – debt-based money – as he did in the comments section of his Forbes article…

The Principal And Interest On Debt Myth
https://www.forbes.com/sites/stevekeen/2015/03/30/the-principal-and-interest-on-debt-myth-2/#41a92a646823

Of course his claim is correct – there is technically enough money in the system to pay all debts – but in flushing out his point he unveiled and economy where the Banksters who lent money from nothing actually made more money than the workers and made the absolutely false assumption that all the money earned by these Banksters as interest on the money they lent from nothing is 100% funneled back into Main Street.
When called on these absurdities, he doubled down and then eventually ran away when it because obvious that the commenters knew too much about the system in order to be deceived by his absurd claims.
I agree with you that Keen is quite the economics intellect – he’s a very bright guy. Therefore, I can’t easily attribute this dissembling to his being clueless.

“The best way to control the opposition is to lead it.”
~Vladimir Lenin

“The better way to control the opposition is to finance it.”
~Yours truly, based on simple observation of that which exists in reality.

WHO finances Steve Keen?
Paul Krugman pretends to be a liberal, but he’s admitted to actively covering up the fraud that is the debt-based monetary system at the behest of the MIT professors who told him to do it!

Krugman to Lietaer: “Never touch the money system!”

It sure appears to me that Keen received the same memo… when the inherent fraud of the debt-based monetary system that systematically aggregated inexstinguishable debts in the hands of Main Street while simultaneously enriching and empowering the Debt-Money Monopolists, STEVE KEEN DIDN’T DARE TOUCH THE SUBJECT AND RAN AWAY IN SHORT ORDER.
Steve Keen is like the guy who analyzes the knife that is currently filleting you in order to extend your life while never acknowledging their is a Debt-Money Monopolist psychopath wielding that knife with the express intent of hurting you very badly.
The fundamental problem appears that people continue to choose mammon over what is right. Then again, it wasn’t like we were warned, right?

“Why We Are So Bad At Solving Problems” was a great article. You said, “If you use energy, you produce waste; use more energy and you produce more waste. And there is a point where you can use too much, and not be able to survive in the waste you yourself have produced.”

The financial elite are the waste. We’ve allowed this waste to build up and we’re drowning in it now.

Re over-population. A few days ago you posted an article re the drought in Africa. Yeah, like that hasn’t happened forever. And yet the man in the article, who used to be goat-rich, now is down to his last few and doesn’t know how he’s going to possibly feed his family of SEVEN! SEVEN!

Optimism is great (and of course the financial elite love to spout off that the gravy train is never going to end, so jump on board), but, goddamn, doesn’t anyone – anyone – think long-term, or use a little bit of common sense, like, gee, we just might get another drought?

The last 30 to 40 years of financial engineering has pulled forward population, pollution, resource stripping, etc. You said in your article, “The bottom line is that we may have good intentions, but we utterly fail when it comes to solutions.”

I think there are a lot of people out there that could come up with good solutions. Problem is we’d have to fight the financial elite/corporate (expletive), and they do not have good intentions, far from it. They do not care whether the planet is stripped naked, just as long as they get to count their money while taking their last breath and know that they won, they came out on top.

The problem isn’t good solutions, but the fact that we’re being ruled by people with very bad intentions. They own the source of money, the government, the courts, the media, the everything. They own us.

“While talking to the media, Erem opined that these entries recorded comprehensive information such as which hotel the terrorists are going to stay in, where they will wait for their car, which gas station they will use for refueling in a mosque in Kilis, how many people and who exactly would be responsible for the preparation of a terrorist attack.

“Despite the fact that all this information was in the hands of the authorities, the security forces had not carried out any operations to detain terrorists. I ask one very simple question: why were these terrorists not arrested?”, he questioned Turkish authorities in his press conference.”

It’s Official! Turkey is Abetting ISIS in Syria

It goes without saying, that NATO and Turkey are parts of the US military complex.

It is amazing how there are still a few brave people prepared to whistleblow.

” Economists Disagree With Voters Who See US Worse Off Today Than in 1960s (WSJ)”

I think this question should only be asked of Americans over the age of sixty.

I consider myself very fortunate to have spent the summer of 1970 in the USA – 3 months in California and one month travelling around (Alaska, Seattle, Dallas, New Orleans, Miami Beach, Las Vegas, New York, Washington etc.)

For a couple of months, I stayed at a fraternity near UCLA campus and in a very posh area – Westwood Village. It cost $1 per night!

I had a ticket for 9 domestic airlines – 14 days unlimited travel. This ticket cost $150. I used it for 2 weeks before someone realised that it should be stamped with the start of travel date. I met a lot of very nice and interesting people who invited me to stay with them.

IMHO, ordinary people in the USA were far better off in those days. The students I met were getting their education almost for free in the California university system. Rich kids would go to USC. I hardly need mention how cheap cars and houses were. I don’t know anything about medical costs. It may well not have been so advanced, but it was much cheaper.

Few things: first, I believe Trump was specifically talking about the Puerto Rico debt, not the U.S. general debt, and he also wasn’t talking about a complete default. I know misquoting him is de rigeur, but we should try to have standards. So in Puerto Rico’s case, which is a de facto state, should we “print” money as Keen suggests to bail them out? Would they do it for Illinois? Texas? New York? Well they sure didn’t for NY in 1975. Nor did they in the Great Depression. So maybe the States, being uniquely DIFFERENT from the Federal government–which no one seems to understand or remember anymore–we don’t just do that? Just like how the ECB doesn’t print money for Greece and Portugal?? Just like how they don’t bail out EU consumers either?

Okay, that aside. Trump said they should “restructure” the debt? A) is that not a better idea than printing 100 cents on the dollar and handing it to hedge funds and other bondholders? I mean, they’re big boys, they’ve known for decades they’re lending to a bankrupt ‘state’. So bondholders never lose while the people do? Is that an American value? B) isn’t “printing” itself a “restructuring”, a writedown? Of course it is: despite Keen assiduously avoiding the basic reality, it devalues the currency. Which is inflation. Which is not paying what you owe. Which is reneging on the debt. Which is the same as restructuring or if done enough, “defaulting” on it. So Keen is advocating Trump’s position, but being slimy by pretending they didn’t re-negotiate and restructure whereas Trump says he would be honest to debtors about the reality of repayment and include them in the discussion. So who’s who here? Which plan is more likely to save national support and credibility, a rule by diktat, or by open negotiation?

With Puerto Rico sovereign debt that inflation might be modest and the Hedge Funds get paid 95% accounting for inflation. But despite Keen’s insouciance, the U.S. printing enough currency to pay off all private debts (or just a slice like all US mortgages, which they could easily have done in 2008 to save the system and all of us but didn’t) would collapse the currency. Oh yes, you can print. But you cannot control the VALUE of the dollar you print. Now why would anyone in the world accept the currency of a nation that, whenever it racked up some debt, simply printed up currency and got out without paying? Clearly, obviously, that nation’s currency wouldn’t be worth a nickel, no more than Ukraine’s, Venezuela’s, or Zimbabwe’s.

It’s totally disingenuous to even suggest you could get away with such a thing. He knows, as all economists know, that amazing, simple plan he proposes wouldn’t last a day. Otherwise, why wouldn’t any and every nation do it? And since he knows this gol-darned well as anyone, what is Keen doing proposing it? This is why commenters disparage Keen as deeply compromised.

Now if you WANT to totally default, as they accuse Trump of –which whatever his real plans, he didn’t suggest–then yes, you could either close the window and refuse to pay, OR print up all your US$-denominated debts in paper chits and mail them to the lenders. And that may or may not be a good idea considering the $18T-$300T we owe can never be repaid anyway. But you can’t pretend it wouldn’t be a catastrophic default of the 1st order. It would be, it would cut off our $500B/yr of foreign imports overnight, make us a pariah state, and restructuring the debt with a hard-nosed deal with the lenders to pay what we can would be the most practical, responsible approach.

But when Trump says it, it’s cray-cray. Even when Keen repeats exactly what Trump suggested a minute later, but in a wildly more reckless way.

All normal ideas are crazy when Trump says them. It’s the law.

PS, please don’t make me defend Trump again. It’s embarrassing. Instead, know your stuff and what he actually said. That’s what informed discussions are all about.