Thursday, November 11, 2010

The Inevitability of Debt

Admiral Mullen said that the US national debt is the #1 security issue. In 2012 the US will be paying 600 billion dollars in interest alone.

What do you think will happen when the US tries to impose austerity measures on its citizens? What do you think will happen when the US tells China it can’t possibly pay what it owes? The problem is, those in charge are psychopaths, and they have their foot on the gas pedal. Historically speaking almost every country that was on the verge of default of debt will resort to war to make their economy better. Attack your creditor and you have a chance of canceling your debt or at least make it not worth their while to collect at the same time stimulating your economy be kicking it into war time production.

So is that the answer? More war?

When are we going to wake up as a species and realize the truth that is the brotherhood of man? We are all related. Bombing the Chinese or nuking the Iranians is just like killing your extended family. Why not try to find another way?

Obviously our economic system is broken and it has been broken for a long time, from about the beginning of the 1900’s. Just last century we fought two of the most brutal wars our species had ever experienced, which also happened to be the same century that our powers of innovation had begun to harness mechanical labour. Also at the same time the central banks became fully entrenched in the US thus consolidating their hold on the rest of the world. Is this a coincidence?

On the face of it you can say that we as a species just become more efficient at killing each other, but if you look at the technological innovation that allows for that efficiency you will see that it is the root cause of the pressure that lead up to both world wars by disrupting the balance that existed in our economies.

Mechanical labour improves productivity allowing companies to produce way more for way less, but also has the side effect of displacing human labour. So you are left with many products to sell but few people to sell them to. Initially you can raise wages and reduce hours allow your workers to become consumers, but eventually the profit motive wins out and to cut costs you cut people. This leads to unemployment and unrest and eventually leads to large standing inventories and stagnant sales.

A wartime economy allows a country to make full use of productive capacity of machines and the consumers become soldiers/government. Wartime economies encourage full employment as they try to gun down their opposition and this restores balance to society by providing jobs to the people and profits to the corporations and gives the country purpose. After the war, old patterns re-emerge with advancing technological innovation causing mass unemployment and profits through production stagnating. Now that we are in an era of globalization, we are hitting a wall, no new markets to exploit to continue this cycle, but yet technology advances on. Unemployment continues to increase and there are hints of yet another war on the horizon. We need to break the cycle.

What do we do?

1. Let deflation take hold. Divide the fruits of technological productivity between workers and owners. We work less and earn less but things cost less, this is a natural evolution.

2. Repeal corporate personhood. Corporate structure is set up entirely to limit liability and the only good to a corporation is the good of profit.

3. Stop loans at interest or create the interest by allowing the government to spend money into the economy. By removing the onus of businesses having to create a profit to pay back loans and bonds the business can then focus on innovation and making quality products. As long as costs are covered and employees are deriving a livelihood that should be the sign of a successful business.

4. Provide the basics in abundance, thereby making it nonsensical to charge for it. Like the air we breathe and the water we drink, both are in abundance and we can have for free. We need to extend this to food and eventually to travel and shelter.

This will act as the template, a stepping stone, to the resource-based economy that the Venus Project proposes.


bkyle said...

How can logic that makes so much sense be ignored for so long? The problem is elected politicians. They don't want to talk about these important issues because they risk losing their jobs. The masses just want everything to continue on basically the same as it always has. Any proposed deviation looks like "crazy talk" and those politicians would get the boot asap. Our leaders are regular people with their own needs and debts to pay. We're in a position where our leaders have to make their own jobs the top priority, and the people must come second.

Vasper85 said...

I hear you brother! The more I spend time debating this issues the more I think some people are just being willfully blind to what is going on!