Illegitimate debts

 » Market pressures could succeed where other approaches have failed. When faced with unsustainable conditions, national authorities often take the opportunity to implement reforms that are considered difficult, as the examples of Greece and Spain show « . This IMF document, dated November 2010, speaks volumes about the timing of the crisis and the debt it precipitated. This opportunity is anything but coincidental because it has been skilfully orchestrated by our neo-liberal European governments — and the others — which are totally incoherent in terms of monetary policy, but totally coherent in the field of budgetary and salary policies: cuts in social spending, reductions in the salaries of civil servants and their numbers, and attacks on pension systems, combined with tax policies that benefit the richest (reductions in direct taxation and tax evasion). In Belgium, between 1986 and 2007, the tax rate for the highest income bracket fell from 72% to 50%. These cuts in turn make the debt service in relation to GDP more important, which causes a rise in interest rates demanded by hedge funds and banks, in a chain with a probable tragic end, as the economist Frédéric Lordon points out:  » this absurd chain of events in which interest rate increases triggered by speculative panic attacks cumulatively worsen budget balances (debt servicing increases the deficit, which alarms finance, which increases interest rates, which increases debt servicing…), to which economic policies respond by deepening the restriction… and the debts  » (Le Monde diplomatique, December 2011).

And this well-tested mechanism benefits the most affluent twice over:  » governments are cutting taxes. They borrow from those they decide not to « tax ». Interest payments transfer wealth to the holders of the debt securities. It strengthens their economic power and their political weight « . The game is said!

The interest of Chesnais’s concise description of the debt mechanism should be emphasized. However, it is worth supplementing this reading with books on what has largely led to debt in a context of rapid growth: the depletion of resources and the subsequent increase in their price, as well as other books on the making of the modern consumer.

The author concludes with a fundamental problematic, known to antiproductivism:  » the crucial questions — what is produced, for what individual and collective needs, where is production located, with what energy expenditure and what conception of work activity is organized — cannot continue to be subordinated to the profit maximization strategies of companies « .


Les dettes illégitimes, quand les banques font main basse sur les politiques publiques, Chesnais, F., Editions Raisons d’Agir, Paris, 2011

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