Unz: A Debt Jubilee Is the Only Way to Avoid a Depression

https://www.unz.com/mhudson/a-debt-jubilee-is-the-only-way-to-avoid-a-depression/

The writer, Michael Hudson, is an academic economist with strong Marxist leanings. While I don’t agree with his politics, his work on the history of money and debt seems pretty solid to me. His perspective on the Covid-19 response is therefore worth examining.

A debt jubilee, which in ancient history was often the same thing as a tax holiday, is the ultimate supply-side economic stimulus. Its straightforward effect was to restore national production so that consumers could get the goods they need.

There is, however, one difficulty. In the ancient world, the majority of debt contracts rolled up to the palace, or government. It would take centuries for a truly privatized financial sector to emerge as we know it today. As a result of today’s distributed debt contracts, it is not so easy to cancel debts on a broad scale as it once might have been. Doing so could damage trust in contracts in general, on which so much commerce depends.

There may be a solution in the fact that money today consists almost exclusively of bank credit which, in turn, is created on computers out of thin air. I suspect there’s an acceptable settlement range in which creditors could take haircuts on paper without losing their ability to remain in business providing money for industry and commerce.

13 thoughts on “Unz: A Debt Jubilee Is the Only Way to Avoid a Depression

  1. Interesting and he also filled in what you were talking about on the other thread.

    My question would be “Who’s debt gets cancelled?” Yours, mine, Boeing’s? Or all of it?

    It appears Mr. Hudson is talking about personal debts. But as proven recently by the GOP in the Senate, it is the corporations that would benefit the most by having their debts wiped out. -IMHO.

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    1. RE: “Interesting and he also filled in what you were talking about on the other thread.”

      Pure coincidence. I shared a different article by Dr. Hudson here in the Forum a month or so ago.

      RE: “But as proven recently by the GOP in the Senate, it is the corporations that would benefit the most by having their debts wiped out.”

      It really serves no purpose to make a fetish of the idea that corporations are evil. Because corporations are employers, they provide the infrastructure for helping workers during a time of crisis.

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      1. I am not fetishizing corporations as evil. I am saying if corporations benefit more than the people who the stimulus is actually supposed to be benefiting, then the gift is evil, not the recipient.

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    1. RE: “Extreme Right, Propaganda, Conspiracy, Hate Group”

      Right. The author of this particular piece, as noted, is a Marxist.

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        1. RE: “He didn’t call out the author, he called out the website.”

          Before you jump on the bandwagon you should check your facts. Unz has published dozens of articles by Dr. Hudson.

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          1. factually speaking, the assessment of the website is accurate. Just because they attempt legitimacy by publishing select articles that feed into their narrative, regardless of the author, does not change those facts.

            Liked by 1 person

          2. RE: “factually speaking, the assessment of the website is accurate.”

            I have to laugh, since I find no shortage of far-left content on the site, especially reprints from Mother Jones and Jacobin. Even so, it makes no logical sense to criticize the source publication for being right-wing when the author in question is a Marxist.

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          3. @Adam

            The logic being employed Here is very similar to that used in Germany in the 1930’s to defend outrageous positions and comments coming from the rising Nazi Party.

            While the arguement made no logical sense it provided cover long enough for them to rise to power; it did not end well……

            Liked by 1 person

          4. RE: “The logic being employed Here is very similar to that used in Germany in the 1930’s to defend outrageous positions and comments coming from the rising Nazi Party.”

            How cute. An actual ad Hitlerum pretending to be the voice of reason.

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      1. The author is not a Marxist.

        https://en.wikipedia.org/wiki/Michael_Hudson_(economist)#Position_on_Karl_Marx_and_Marxian_economics

        “ Hudson identifies himself as a Marxist economist, but his interpretation of Karl Marx is different from most other Marxists. Whilst other Marxists emphasise the contradiction of wage labour and capital as the core issue of today capitalist world, Hudson rejects that idea and believes parasitic forms of finance have warped the political economy of modern capitalism.“

        He sounds a lot more like a capitalist who laments the wayward direction capitalism has wandered.

        Not too far off from my layman’s observation that capitalism’s best friend is a strong social safety net including universal access to affordable education and healthcare as well as solid unemployment benefits during financial downturns.

        Your label of Hudson as a Marxist is a bit like calling him a communist, which I don’t see.

        Liked by 2 people

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