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London Futurists: Why Capitalism Needs a Modern Debt Jubilee to Survive

Summary:
Ordo-liberals like German Finance Minister Wolfgang Schauble insist that enforcing contracts is essential to capitalism, and when applied to financial contracts that means that debt forgiveness is out of the question. They also insist that a prudent government at least runs a balanced budget, and preferably a surplus. However it is easy to show that ...

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Ordo-liberals like German Finance Minister Wolfgang Schauble insist that enforcing contracts is essential to capitalism, and when applied to financial contracts that means that debt forgiveness is out of the question. They also insist that a prudent government at least runs a balanced budget, and preferably a surplus.



However it is easy to show that a pure capitalist economy with neither bankruptcy nor government counter-cyclical spending will collapse into a debt-deflation; and the crisis that began in 2008 is a real-world instance of this tendency. Debt writeoffs are thus essential to the survival of capitalism, and a Modern Debt Jubilee is needed to end the economic and financial crisis.



My blog www.debtdeflation.com/blogs discusses a Modern Debt Jubillee at http://www.debtdeflation.com/blogs/wp-content/uploads/2012/01/TheDebtwatchManifesto.pdf



Steve Keen
Steve Keen (born 28 March 1953) is an Australian-born, British-based economist and author. He considers himself a post-Keynesian, criticising neoclassical economics as inconsistent, unscientific and empirically unsupported. The major influences on Keen's thinking about economics include John Maynard Keynes, Karl Marx, Hyman Minsky, Piero Sraffa, Augusto Graziani, Joseph Alois Schumpeter, Thorstein Veblen, and François Quesnay.

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