- David Graeber hit the big time yesterday with a review in the New York Review Of Books of his book "Debt: The First Five Thousand Years". Have you read it?
- Yes. It's good.
- The review points out that the rich don't pay their debts. They are allowed to go bankrupt, keep their property and their debts forgiven. Or they get governments to "loan" them money which they loan back to the government, which pays them interest, and they use that interest to make their debts disappear. If the poor ask the government to give them a few billion dollars to loan back to the government, ask to government to pay them a few hundred million dollars interest on its own money, and then they the poor would pay their debts too, what would the government say?
- The New York Review Of Books is admitting the U.S. government is biased in favor of the rich?
- Remarkable, isn't it?
- Only because nothing is likely to happen.
- Which is what the article itself says.
- Really? Why does it say nothing will happen?
- Because as Graeber's book shows this game in various forms has been played for 5,000 years.
- The rich don't have to pay their debts, the poor do, because the poor don't have the money to bribe the government. What would happen if people knew this was going on?
- For the past 5,000 years when people know they throw out their government or force it to cancel their debts.
- Why isn't that happening now?
- Well, this is great. Our government as we speak is pretending to be poor.
- You mean, pretending that it has to pay its debts.
- Right. So it has to cut social services and save money.
- The government is of the people, and if the people are poor, so ought to be the government.
- Except that the government, any government, is by definition rich.
- What do you mean?
- When the rich owe money they can't pay, as we saw they get the government to loan them more money which they then loan back to the government at interest, and then use the interest to pay back their loans. Is there any reason a government can't do the same?
- Loan money to itself? How?
- By creating more money. Printing it. Creating assets in its bank accounts. Then spending the printed money, sending to other accounts the money they made appear in its own.
- As banks are allowed to loan to their customers money they don't actually have.
- Yes.
- So the question really is, how is the government getting away with pretending to be poor?
- The government is answering that question all the time. The rich are not subject to economic laws, because with bribes they can create an infinite amount of money to make the "laws of money" meaningless. Similarly they are not subject to the political mechanism of "compromise" of interests. But the government, as a representative of the people....
- Ha!
- ... The government, being poor like the people, must be subject to the political laws of compromise, balance of power....
- ... Power to bribe!
- ... So our government, being poor, has to accept the economic and political conditions as existing political and economic mechanisms produce them.
- And that works. People go along with it.
- They do.
- When the government could go from poor to rich literally in a second by printing money.
- Yes.
- Why don't the bankers let the government do it, just to get the poor off their backs?
- In Europe, the rich actually got written into the EU constitution that the banks could not do that.
- Why?
- The rich make money out of loaning money at interest. When more money is created, money is worth less.
- Inflation.
- So the interest the rich have coming is worth less.
- But it's not written in our constitution.
- Doesn't have to be so long as we're convinced the government is poor.
- As long as we're mentally poor.
