Monday, March 18, 2013

Debt is Not Social Policy

The history of the country since Ronald Reagan has been to put off problems by letting people and institutions borrow money.   But debt does not solve problems, it only puts them off and makes them work for the benefit of a few.

Yes, debt works against in some situations.  A young family borrows money for a house -- borrowing against future earnings. People buy a car on time to spread the cost over the life of the car.

Under conservatism, when housing prices outstrip the earning power of the average family, the government does not support affordable housing,  but makes mortgage credit easier.  The rising costs of college and advanced training for good jobs?  Just let more students borrow money to go to school.  And when a major city like Detroit faces a fiscal problem because it has been abandoned by industry and its population, the solution is to have the city sells bonds to pay the bills.

In the end, the lenders and creditors control everything.  They amass huge fortunes; the rest of us are broke and we still owe them more money; and they insist on being paid.

The road not taken is to raise enough revenue that we can finance what needs to be done through the public sector.  The dominant power of the financial sector is at the root of many of our problems.  They will have to get a haircut to restore balance in our economy.

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