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Have you seen what they do with that stuff?

In a conversation over on Facebook about the quarrels among the governing politicals parties over fiscal policy and deadlines, Keith Taylor summoned the spectre of repudiating the US government’s debts. This is as you may know the course that I favor for moral reasons; I also think that it is, rhetorically and strategically speaking, the best demand for radicals to make. (Any other demand, any bit of reformism, is always going to entangle you in an inescapable, and ultimately ridiculous trap: it’s not a radical’s job to try to find a way to keep the apparatus of government or the apparatus of global finance capital running efficiently. Our only job is to demand that people be freed of the coercive and exploitative demands of both.) Anyway, in reply to Keith’s comments, David Miller replied:

As the resident non-radical, there’s a lot I could say here, but I’ll just ask — how do you just cancel the debt? Investors and foreign governments buy up our debt because they see the U.S. as a trustworthy investment (a fact that eludes the people who endlessly try to terrify people into thinking we’re on the brink of financial collapse). If you just declare that it doesn’t exist, how do you not topple the global economy in the process?

Here are my answers to David’s questions and comments.

Q1. How do you just cancel the debt?

A. By not paying it anymore.

C1. Investors and foreign governments buy up our debt because they see the U.S. as a trustworthy investment . . . .

A. Right, and if the government repudiates its debts then they may no longer be willing to buy up government bonds in the future. Now, this might seem like a bad thing if you think it’s important to make sure that the US government is always able to issue more bonds in order to raise more money. But how desirable or even acceptable that is is going to look will depend (in part) on how desirable or even acceptable you think it is for the US government to have lots of ready cash. Since the major function of US government debt has always been to fund the US government’s imperial foreign policy and its repeated capital-intensive wars; and since the ready cash it has is constantly put into merciless bombing, war machines, atom bombs, international sanctions, drug prohibitions, prisons, ICE raids, border patrols, detention centers, warrantless wiretaps and surveillance, assassinations, military incursions, and the whole apparatus of massive global violence — along with the occasional multitrillion dollar banking bailout to preserve the habitats of endangered capitalists — I really have trouble seeing the loss here.

Q2. If you just declare that it doesn’t exist, how do you not topple the global economy in the process?

A. I think there’s a big and important difference between toppling the government’s account books and toppling the global economy. That said, toppling the present economic system would also be a massive improvement for the overwhelming majority of people in the world.

I didn’t mention this on Facebook, but I will add here that the fundamental flaw in most pragmatic discussions of fiscal policy, debts, and repudiation is that they are pervaded by an unargued presumption that government offers services that benefit the people it governs. In fact the overwhelmingly dominant function of government, in everything it does, is overwhelming dominance; it is characteristically an institution of violence against the governed, not a service to them. It would be better for us to take all the cash that government takes in through credit issues or through taxes and pile it up on the White House lawn, douse it in gasoline, and set all that money on fire than for it go towards keeping the U.S. Treasury running.



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3 replies to Have you seen what they do with that stuff? Use a feed to Follow replies to this article

  1. Discussed at reasonandjest.com

    Articles for Another Tuesday » Scott Lazarowitz's Blog:

    […] Rad Geek on What to Do with Government Debts […]

  2. Robert

    The real problem with “canceling the debt” is not China. While there are good arguments both ways for worrying about debt and credit scores and so on, not paying China would not likely lead to war. It would shutdown all cheap imports since a lot of the debt relates to trade imbalances.

    The real problem is who we owe it to. China owns a small fraction of the debt. Our allies such as UK and Germany own just as much. They probably wouldn’t go to war either but they wouldn’t be our friends anymore.

    But even setting that aside, the majority of the debt is owed to our own people. And you can say, “well they are rich so who cares” but most are not rich. The owners are grandma, a school teacher, a factory worker who holds savings bonds, and finally practically every pension system in the country. From state retirement systems, to the railroad retirement system to Social Security. Repudiating the debt means almost all US retirement systems collapse. It means states that have acted responsibly and balanced their budgets and established rainy day funds, which are largely held in federal debt instruments, will get wiped out. We are in a helluva mess no doubt about it but the real reason I stopped by was to report my visual/html editor buttons on syndicated content disappeared with the latest FeedWordPress update. And thanks for making a great plug-in. Robert

— 2013 —

  1. Discussed at radgeek.com

    Rad Geek People's Daily 2013-07-26 – On Detroit, or: Cities don’t go bankrupt, city governments do.:

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