We often talk about the national debt as though it is the same as the burden of debt shouldered by households.
But the two couldn’t be more different.
“People think ‘paying down the debt’ will improve their financial lives because they believe that the government’s debt is their debt” says economist Ellis Winningham. “In reality, the government’s debt is the private sector’s asset.”
“The public debt is just a bunch of savings accounts that pay interest.”
Economist, Professor Stephanie Kelton, former Chief Economist on the US Senate Budget Committee and economic advisor to Bernie Sanders tells Renegade Inc. that the starting point is to recognise that the currency itself is a simple public monopoly, everything else follows from there. The concept of the debt ceiling is an artificial creation of Congress and can be lifted and abolished at any time.
“Congress put the debt ceiling in place,” she says. “Congress writes the rules. It’s like me bending over and tying my shoelaces together and then complaining that I can’t run a marathon.
“All I would have to do is squat down and untie my laces. It’s the same thing with the debt ceiling limit. Congress put the ceiling there and only it can lift it or remove it altogether, which is what it probably ought to do.”
The debt ceiling is a term particular to the US but the same could be said of any Parliament or government that issues its own currency.
Professor Kelton says the US government issues the US dollar and it can not come from anywhere else.
“If you and I get caught trying to print our own dollars out of our basement, it’s called counterfeiting and we go to jail,” she says. “We do not have that right. But the US government has reserved for itself the exclusive right to manufacture the US dollar.”
Economist Dr Steven Hail tells Renegade Inc. that the US government can issue as many dollars as it wants, for free, so long as it does not create inflation.
“It doesn’t make any difference whether the invoices are in US dollars, euros, whatever, although each country does its accounting in its own currency.
“Once you see government bonds are just really a form of money, then you see that it really isn’t all that different. The bonds are really just ‘corporate welfare’.”
Host Ross Ashcroft talks with the anthropologist David Graeber about Batsh*t Construction, a trend that has gripped the world.
Unless we start calling the housing crisis by its real name: extreme land monopoly - we’ll end up with ever more loony solutions for what should be a basic human right.
Liz Fekete and Professor Simon Winlow join Renegade Inc. to discuss the failure of mainstream politics and the rise of the far right.