Simply “printing” more money and adding more debt to the existing enormous debt load in the U.S. is not a solution. It is particularly irresponsible when it is done with no connection to social production and the working class. Non-fictitious value comes only from the labor-time of workers involved in the process of producing goods and services. Value cannot come from thin air. Capital does not magically produce value by itself.
Currently, the Federal Reserve’s balance sheet is approximately $7 trillion. The national debt is about $25 trillion. The federal debt-to-GDP ratio is 120%. The higher the ratio, the harder for a country to reliably pay back its debts. Many believe it is mathematically impossible to repay these historically unprecedented amounts. A massive black hole of debt has been rapidly created by the financial oligarchy.
Recently, Torsten Slok, Chief Economist at Deutsche Bank, estimated that if the U.S. Federal Reserve were to simply purchase everything (“monetize all assets”), it would total $130 trillion. Others have come up with similar estimates. The unthinkable may become thinkable.
It is important to appreciate that the state-sanctioned ability of the financial oligarchy to create counterfeit money serves only to further enrich the financial oligarchy while further reducing control over the economy by working people. Such unconscionable moves concentrate more money and power in even fewer hands and foster the illusion that real workers and real production are superfluous.
If anything, now is the time to demand a debt jubilee, also known as a moratorium on the debt—all kinds of debt. Economist Michael Hudson points out that throughout history large debts have been repeatedly cancelled for a range of reasons. And as Ellen Brown notes, we need a robust public banking system that actually serves the public interest. We do not need a private banking system or economic setup that ensure more tragedies for the people.
Cancelling all debts would bring enormous overdue relief to millions of Americans.
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