Australian economist Steve Keen is on tour in The Netherlands. Friday 13 December he visited Amsterdam. His message is clear: “Private debts are far too high and immediate action is necessary. For example a bailout of private debtors. Stagnation for a long number of years may be possible if nothing will be done.”
The following excerpt from ‘Geld komt uit het Niets’ illustrates this:
“For some years back I published an article on the Jubilee subject. This practice has been honored by the Sumerians and the Hebrews. Once in 49 years all debts were cleared. The reason behind this was the awareness that a society will drown in its own debts if nothing happens.
The financial system is very complicated, that is true, and it seems undoable to identify the net creditors of those many trillions of net private and public debt all over the world. To whom should we turn to ask for this massive bailout?
The idea of a Jubilee seemed to disappear out of the picture until I received support from an unexpected side, i.e. Australian economist and professor Steve Keen, who points at the enormous risks for an economic disaster caused by unlimited digital money creation by banks, leading to equally unlimited private and public debts.
Steve Keen, author of “Debunking Economics”
This inspired me to this proposal:
• Money creation by a democratically controlled and not politically driven public institute.
• This public institute brings debt free and interest free money in circulation.
• The first act of this institute is to fill the cash reserves of the commercial banks with enough liquidity to cover all private and public debts the banks hold. This action will be combined with an end to money creation by private banks.
• Commercial banks alter their earning models from interest based to service/quality/time based, and will act as socially responsible distributers of money. Of course their task is to identify risks as their main goal is to add to the welfare of society, and thus prevent destruction of capital due to wrong investment decisions.
• Money is interest free, as earning money with money is no longer an issue.”
How little the comprehension of a bailout of private debts is understood appeared from the response of professor and former DNB director Lex Hoogduin, who said that a Jubilee would cause ‘a great danger of a profound crisis’ and would be ‘unjust’ . Hoogduin assumes that the rich should bleed in favor of the poor. Apart from the fact that he shows incomprehension, Hoogduin also denies the growing wealth inequality, caused by the redistribution mechanism which is an important feature of the present financial system. This system favors people who are in the position to let money work for them. The Swiss researcher Herbert Creutz and German professor Margrit Kennedy state that 90% of the households in an economy are net payers to 10%, because those 10% are in the position to let ‘money work for them.’ Indeed 60% of the Dutch households have a negative or zero wealth, whilst the richest 10% of the households possess 60% of the total wealth. This inequality is increasing as the ‘rich’ reinvest their wealth in investments that bring no employment -at least not in Europe-.
Hoogduin concluded that “We should not enter in dismissive experiments such as bailouts of private debts. The Dutch economy is much more stable as the model of Keen suggests. Uncertainty plays a far bigger role, and this model cannot cope with that… We should not be too pessimistic.”
No, Dutch opinion leaders are not ready for the ideas of Steve Keen. In politics the word is not even mentioned, and if so as a joke, because the general attitude is that you must be a ‘weirdo’ to think of a Jubilee as something that should be taken seriously.
Near the end of the meeting Steve Keen observed on the question about the role of politics, and who and when they would take action: “By the right wing populist parties in Europe, especially in countries such as Spain and Greece, and by breaking bones instead of breaking through the deadlock.” These ominous words disappeared in thin air, because seemingly no one noticed them.
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