It’s incredible that Las Vegas, the gambling capital of the United States of America, sports a replica of the national debt clock which stands in pride of place at Bryant Park, New York.

It’s put there to give people the willies; to get them worried about government expenditure and federal ‘debt’. So-called ‘libertarians’ love it. It’s a misguided neoliberal ‘austerity’ thing.

“Look over there at government debt! Gamble all you like here, folks!” Seems private debt doesn’t matter at all.

It’s even more ironic that the clock was the idea of a real estate magnate who made his fortune from escalating land prices.

The real threat, for which there’s no public clock to measure–especially in Vegas!–is certainly the level of private debt. Attaining levels of impossible private debt brings economies to their knees every 18 years or so. Much of this debt relates to the servicing of land prices in mortgages. Were governments to shift taxes from wages to land prices, it would reduce land prices and keep the lid on them; then private debt would remain manageable.

Federal debt may always be paid by government, the issuer of the currency. However, this is no apologia for federal government misspending over which the public ought to have control via its elected representatives. They rarely do, however, because (despite occasional slaps over the wrist with a wet lettuce) the finance, insurance and real estate kleptocracy (the FIRE sector) has taken over the control of economies.

If we had private debt clocks around the world right now, they’d provide a far better perspective than this sign in Las Vegas. Banks and monopolies have become the economy. Things aint looking good: ‘the private debt piper must be paid’.

Must he – really? Maybe people matter more than failed banks?

“The conflict of interest between the Donor Class and the Voting Class has become too large to contain within a single party. “

https://www.nakedcapitalism.com/2020/02/michael-hudson-the-democrats-quandary-in-a-struggle-between-oligarchy-and-democracy-something-must-give.html

Financing asset bubbles has become the name of the game. We don’t call it ‘monopoly’ any more. Banking and rent-seeking is the economy. Finance, insurance and real estate (the FIRE sector) rules .

People, and their impossible levels of escalated debt don’t matter – at all.

Economic madness.

And, like all fairy stories, this is going to end well.

Meanwhile, in another part of town ……

For the study of political economy you need no special knowledge, no extensive library, no costly laboratory. You do not even need text-books nor teachers, if you will but think for yourselves. All that you need is care in reducing complex phenomena to their elements, in distinguishing the essential from the accidental, and in applying the simple laws of human action with which you are familiar.

• Henry George “The Science of Political Economy”

And, of course, a necessary adjunct, either to MMT or Positive Money, is the public capture of ‘ground rent’–advocated by Adam Smith, David Ricardo, JS Mill, Henry George, Mason Gaffney and Michael Hudson–because if private banks continue to fund the ongoing pathology of land prices, people and economies will still be brought to their knees at regular intervals.

Interesting Q&A episode on ‘Trust’ last night.

It was a telling moment when Jacqui Lambie trapped Liberal MP for Higgins, Katie Allen, and Labor MP for Hotham, Clare O’Neil, like startled deer in party donation headlights.

Jacqui has her shortcomings, but her independence and honesty is refreshing in Australia’s increasingly stultified parliamentary politics.

The ‘yes’-‘no’ of party politics has surely had its day and is obsolete? But stolidly, it remains with us. Oh, for a system of proportional representation voting for the lower house, as with the Senate!

And, yes, Jack Manning Bancroft, there are some of us reading things other than you have. You’re close ….. but no cigar! In fact, our aboriginal people have something to tell us about the sacredness of land: that it can’t really be ‘owned’ – it’s common property.

Yet we choose to treat it like a commodity, bidding land prices up into impossible mortgage bubbles that are about to tank across Australia.

The complete financialisation of the economy directed into land price and share market bubbles is obviously quite pathological – but we persist.

For the sake of Australia, we need to call it out if we are to rebuild trust in our politicians.

The 8th episode of “Front Running” with Max Keiser and Stacey Herbert and guests Randy Voller and Michael Hudson discusses the madness that has Wall Street pumping up asset bubbles as it consigns Americans into impossible levels of debt.

Michael Hudson suggests that the Democrats are now so tied into Wall Street, that it cannot permit Bernie Sanders to win the race to Democratic Party pre-selection. Donald Trump is a better proposition for them than Bernie!

To say Wall Street is ‘winning’ at the expense of Main Street is no socialistic exaggeration: it’s happening before our eyes, and the levels of private debt bear this out.

If they’ve paid off their homes and not in debt, maybe some baby-boomers are feeling relatively comfortable, but their kids are still paying off their student debt, and any deep scrutiny of the American economy is damning.

Most people are in impossible debt, so a financial crash is inevitable.

So, come the crunch, how do we reset?

1. We bail out people – not the banks: “Too big to fail” has failed us!
2. We introduce a universal basic income at a generous rate.
3. We shift taxes off productivity and onto economic rents, in order to (a) protect the currency* (b) generate real jobs (c) abolish private rent-seeking. [*We should seek to capture all economic rent – on land, minerals, electromagnetic spectrum, &c.]
4. We institute a proportional representation voting system for all elections
5. We do away with the misguided notion of ‘balanced federal budgets’, replacing it with spending on projects deemed worthy on the basis of sound cost-benefit analyses. [*The currency is protected from inflation, as above.]

This reset ain’t too hard. It’s both doable and essential, if we’re not to experience a lingering socio-economic depression.

Maireid Sullivan’s great omnibus.

https://ro.uow.edu.au/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir=1&article=1541&context=buspapers