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 justcancel 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.
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.
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.