5 August 2009
As we stagger on through the summer with our ball-and-chain of impossible debt it appears that the accepted view amongst commentators is that we must knuckle down, swallow the unpalatable work-ethic pill, and 'create more wealth' to pay it all back. These people must think that we all suffer from the sort of scale-blindness that makes it impossible to grasp debts of this size, just as we can't really feel compassion when we hear about thousands of children dying in famines or millions being threatened by climate change.
Because if we can maintain some sense of perspective we rapidly grasp that the implications of the public-spending cuts caused by bailing out the banks on such a massive scale are devastating. Borrowing announced in the budget amounted to £175bn. in 2009/10 and a huge £701bn. over the next five years. If you add in our liabilities for bad debts we have ‘insured’ (since they are already bad debts it seems certain that we are going to have to pay these liabilities) then the total we are in hock for is more than twice the value of all the activity in our economy for a whole year. Just the interest on this borrowing is more than £40bn., about a third of total NHS spending in any one year. Following this year’s budget public spending will fall from 48% of national income to just 39% by 2017-18, with the health budget facing cuts of £10.5bn.
The question of the public finances is the major political issue for our generation. Smart government accountants can find ways to shift financial liabilities through time but we should not be distracted from the central political question: why should the poor pay for the mistakes of the rich?
There is nothing new about the accumulation of wealth in the hands of a minority: capitalism only increases the efficiency, speed and scope of accumulation. The ancient Hebrews had a way of dealing with this problem: a jubilee, where there was a forgiveness of sins, a wiping out of debts — and universal rejoicing. True to the biblical idiom it occurred every seven-times-seven years. So this can be our political demand: an international debt jubilee to relieve the working people from the slavery of repaying mountainous debts for which they are not responsible.
Not paying your debts can be a little embarrasing, but it is nothing compared to the consumption of energy and resources (and its impact on the planet), the sheer tedious drudgery, and the social conflict that seriously attempting to pay back debts on this scale will require. Tweet