by Hugo Salinas-Price
When the world’s present troubles surfaced about five years’ ago, I recall reading articles whose central theme was: “There is excessive debt in the world. The amount of debt in the world exceeds the capacity of the world’s economies to service it and pay it down.”
To address the excess of debt in the world, four courses for action were mentioned:The debt burden could be reduced by paying it down, via a policy of increased taxation.The debt burden could be reduced by a policy of allowing mass bankruptcies to take place, which would write off substantial portions of the debt.The debt burden could be reduced by a policy of massive monetary inflation which would devalue all debts and make them payable.Alternatively, the intolerable debt burden and its absolutely inevitable reduction, nolens volens, would probably be achieved by a combination of all three policies.
In the intervening five years, the world’s excessive debt burden has not been reduced; on the contrary, it has increased. The governments of the world have behaved ostrich-like, burying their heads in the sand to ignore the problem, adopting infantile “extend and pretend” policy to debt and allowing further increases in debt in the hopes of spending their way out of difficulties by adding more debt to existing debt.
What can we expect of all governments in the world, today?
Not one single government is going to raise taxes to pay off debt. Such policy is contrary to the prevailing ...