Home > Uncategorized > Someone forgot the poor debt-forger in all this talk of debt relief

Someone forgot the poor debt-forger in all this talk of debt relief

Jeremy Warner of the Daily Tele in the UK cries for the bankers:

My gripe is with the casual way in which debt restructuring is now considered not only a perfectly acceptable solution to the problem of over indebtedness, but actually an obvious panacea which only the wicked lenders resist. Have they no heart, have they no mercy? What about the poor oppressed Greeks and Irish? Are they not to be pitied and helped back on their feet after their decade of credit abuse?

Well no actually. Ordinary Europeans were not responsible for the the gross irresponsability of their bankers, but they were all very much a part of the credit fuelled party, and the idea that they should now be forgiven the cost somehow sticks in the craw. For every pound saved by the borrower, there is a pound lost by the saver. The thrifty and responsible are being obliged to pick up the tab for the irresponsible and the feckless.

OK, OK, so I’m beginning to sound like Shylock in the Merchant of Venice, but let’s have a little sympathy for a change for the disenfranchised saver, punished and ripped off yet again for his virtues.

In Aesop’s fable of the ant and the grasshopper, the ant toils through the summer months building his house and piling up stores for the winter while the careless grasshopped parties away amid the bounty of the present. When the winter comes, there’s no food and the grasshopper has to beg the ant for help.

Only it hasn’t worked out that way. What’s actually happened is that the grasshopper has broken into the ants house and stolen all the winter food.

Sometime towards the end of the boom, an acquaintance of mine bought a highly desirable house just round the corner from me. It made me very jealous. “Of course, it’s way beyond my means”, he said, “but I didn’t have any trouble borrowing the money”. What happens if you cannot pay it back, I ventured? In fact I needn’t have bothered with the word if. It was quite obvious he would never be able to pay it back. “Oh, the bank will just write if off, won’t they?”.

This was, and remains, a remarkably common attitude. I don’t doubt that Europe’s periphery needs debt write-offs, but if I were Irish, I’d be very wary indeed of the idea that this is a cost free way out. Sovereign default, even through a managed restructuring, is a big deal. It will be decades before these countries win back credibility in the markets, and in the meantime they’ll be paying horrendous interest rates for anything they do manage to borrow.

Does no one understand that the creation of debt itself was illegitimate, a forgery, an act of embezzlement an act of counterfeiting.  Banks don’t transfer savings to borrowers, they create debt money out of nothing.

When you understand this you understand how deceptive Warner’s bullshit about screwing the savers really is.  We should kill the embezzler, the shyster, the counterfeiter and forgive the debtor when that act of indebtedness was created fraudulently.  There is no injustice in that.


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