I have said many times since 2007, that the scale of the debt weight pressing down on the masses and the world economy suggests that knocking off zeros will be needed to get out from under. That can only help however, if the debt and risk-magnifying machine of the financial sector is also deconstructed and re-directed in service of the broader economy, rather than allowing a few to continue enriching themselves with short-run profits at the expense of our longer run strength and stability.
Those who cry that this would involve government intervention in ‘free markets’ are missing or ignoring, that reckless financial firms have been backstopped, enabled and bailed out by governments for decades now. Extreme corporate welfare has allowed them to become the menace that plagues us. Time to restructure. Keen offers some novel ideas on how in this segment.
We connected with economist Steve Keen who unlike most practitioners of the dismal science actually proposes solutions that might even work. As almost anyone will tell you, the world economic system is a mess. There’s way too much debt and not enough equity. Steve proposes paying everyone in the US a fixed amount of money. For those in debt, it would have to be used to pay it down. Those few among us who are solvent would use it to buy shares in companies who would be required to pay down their debt. It might not be practical but there’s a certain sense to it. And in any event, it sure beats QE. Here is a direct audio link.
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