Solution to Dept Crisis

There was a Greek leader by the name of Solon, 5th century BC,who proposed a solution for the rift between the rich and the poor who were becoming more and more indebted to the rich. The solution he proposed, to avoid a crisis was to cancel the debts owed by the poor. There were some unhappy people, considering, but the measures did succeed in bringing stability back to the economic system of the early Greek state. Solon may have prevented a meltdown. Could such a measure be introduced worldwide, to avoid Economic collapse. The U.S. cannot afford another bailout of the Wall Street at the taxpayers expense. This was the exact revers of what Solon accomplished. Now the poor are even more in debt to the tune of another 700 billion. How about all nations banning together to simply write off all of the debts? Who would be hurt the most? The countries and banks to whom the debts are owed: China being one of them. I am not an economic expert, but there is no other way out … sooner or later the economy will collapse worldwide; or will the debts climb up to infinity? Our politicians created the debt by spending more than they could bring in with taxes. If cancelling the debts doesn’t work there is no other possible outcome but a global meltdown of the world’s sick economic system. Your children (I say yours, because my wife and I have chosen not to have any) do not deserve being burdened with debts created by past generations. They’re born literally into this debt and they’ll be paying for it for the rest of their lives, without having had any part in creating it. So, write off all the debts, for their sake. Something drastic needs to be done, and this is one drastic solution to what amounts to an even more drastic problem.

The problem with canceling debts is it is just a small bandage. It fixes nothing in the long run. Education is the key. The only debt We have is the motgage. We live within our means and if emergency borrowing is needed we tighten our belts and pay it off asap. No credit cards or checking accounts, just a savings account. Older cars instead of new. Bulk shopping etc, etc.
Education of the people on how to spend or not spend is the fix you look for.

First off, you have no way of really proving that such a policy worked for the Ancient Greeks, much less that it would work now. The rich are not stealing from the poor. The debt is due to people spending beyond their means, which is in large part due to the adoption of the pseudoscience called Keynesian economics. When interest rates are kept low, people have little incentive to save and a lot to borrow. Also, government is an instrument that exists as a method for politicians to spend money without paying for the spending through taxes, which is a way to get votes. This is the main reason central banks exist – to make this easier for the government to engage in debt spending.

If you want to eliminate debt, get rid of false economic doctrines.

On the contrary.

The rich steal from the poor in the same way somebody consents to being stolen from by a thief who leaves their victim with no other reasonable choice.
Often they don’t even consciously realise this process, despite the most obvious logic that in order for people to become relatively more rich, others must become relatively more poor.

This would be correct if by “people” you meant “rich people”.

Entire economies only grind to a halt when people who actually have economic influence start refusing to pay. It has nothing to do with Keynes or the poor. Borrowing has increased amongst the rich because it widens their influence beyond their means, increasing the potential to “steal” (as explained above) money from the poor, meaning the poor can only keep going by resorting to the same habits. Pushing the limits of how much people are allowed to borrow is only a realisation by the rich that that’s the only way that they can continue to live beyond their means - consequences be damned.

And as for getting votes, we all know election campaigns are funded by rich beneficiaries.

Absolutely.

If you think first hand experience - of what these irresponsible spenders go through, despite their rational knowledge that they shouldn’t live beyond their means - isn’t the best education anyone can get, then you’re simply wrong. Someone else teaching you to change your personality simply doesn’t work - these people will put their hand in the flames over and over, no matter how many times they do it and no matter how many times they are told and tell themselves not to.
These people aren’t going to go away - we need to be realistic and work with what we’ve got rather than insisting on changing that which cannot be changed. Your own restraint is only proof that you are not one of these people.

There are very many ways to solve the “debt crisis”… if those with the money wanted it solved.
And those throughout history who have made any headway for some reason manage to get assassinated.
I can’t image why. :confused:

Money is a con game. The greatest serpent gets the most money.
And since money translates into influence, he generally keeps it and gets more.

Indebtedness translates into slavery.
Why release your slaves?

Sil, you are right about adults not learning. I was thinking about kids though. Getting adults to change habits is a pain in the ass× 10000. Revamping required courses from grade school to high school would be a good start. Restricting advertising and sales is akin to holding your adult child’s hand while crossing the street. That says you failed to teach that person or that they are too stupid to protect themselves or both.
Start young with a good education and society will change. You gotta admit that education can be vastly improved in several areas.

It would seem that you are of the opinion that children are perfectly malleable - I intensely disagree. Whilst adults are more set in their ways and behaviours, and children are not so much, we are all still far from a blank slate. Now, I am not about to say that children cannot learn and adapt - that would be patently false - but I am saying there are significant limits to these things, unique to each child (and adult).

Yes, education can be improved in many ways - of course. And if it were it would have some effect, but by no means would we be anywhere near eradicating irresponsible spending and lending. Your response isn’t invalid, it’s just a Band-Aid. It doesn’t actually solve anything.

Getting rid of false economic doctrines, like IANoTT said, is the key. Ironically, I too am proposing education… but critically, not education to change behaviour but to increase understanding of what is actually going on (compared to what could be going on).

Who in their right mind would be pro-Capitalism if they learnt exactly how capitalists become rich - through deceptively causing money that you earn to steadily flow to others? Especially since this process is permitted to be pushed to the limits of what people will put up with, and beyond - given the hugely limited amount of other options reasonably and legally available. Of course, this doesn’t apply to actual Capitalists themselves - of course they should be pro-Capitalism. It’s just that non-Capitalists have been somehow fooled into believing this system benefits them too.

But I dunno, maybe I’m giving people too much credit - I know so many masochists out there who are intent on slaving their way through the system at their own expense, just to afford something resembling a good quality of life (although these types seem utterly incapable of enjoying such rewards).

An odd thing to notice: generally the prime rate of interest, is usually correlative to the rate of unemployment. But one thing though: if the quality of life is measured as the fraction generated by taking the increase in the rate of change in wages over the cost of living: the cost of living is around X2 than the corresponding increase in wages the last 40 years or so. This is not surprising since 40+ years ago the heated post ww2 US economy was at it’s peak. However another halving of what they call the quality of life can not be afforded, with housing, eating up nearly one half of available medium income. Remember when the rule of thumb was 1/4 of income going toward rent? Well, if your monthly income hovers between $2,000 and $2,500 per month, try finding a place for $500 per month nowadays. 1/3 of all Americans live in poverty nowadays. On top of that, jobs, production are being outsourced, and open immigration is allowing a depression on wages. The net short term outlook is anything but bright, and major wars are seen as obsolete. Therefore the outlook is anything but rosy, and the only way to save from a regressive cycle is affording more debt, since fewer americans save. James is right, debt is enslavement through increasing and futile planned obsolescence.

The people commenting here could not be more wrong, and have no evidence or logic for their claims. They believe in a zero-sum game, that is, if one person gains, another must lose. But, if that were the case, then wealth would never increase, and we should all be dead by now, since our population is dramatically greater than what it was during the cave-dwelling days. No capitalist forces anyone to do business with him or her, so it is actually the customers that dominate the capitalist. And we have seen repeated examples of giant businesses going under over time. The debt is not due to capitalism, it is due to socialism. Keynesian economics has all of the hallmarks of a pseudoscience. It is amazing people are dumb enough to believe in it, and I suppose only an “intellectual” could do so. If free markets existed in the banking system, instead of socialism, then as people borrowed heavily, interest rates would rise, and people would then borrow less and save more. There could be no systemic private debt in a free-market system. And as far as government debt, if the government did not have a central bank, which it uses to engage in the exact same criminal activity as a counterfeiter, government debt would also be held in check, as people would protest the rising taxes.

 It is not a matter for logic only facts: and those are the ones I listed above: common sense at times trumps projections charts and theories.

Case at hand: some item costs in 1969 for example:
Pack of marlboros : 25c. Now $5.00+ increase 2000% gallon of gas 1969 18 c now $4.00+ increase 2000% rent 1969 a bedroom apartment $50/month
Now 1,500/month increase 3000%

Now wages : minimum wage 1969 $2.75 /hour now $7.00 per hour increase approx: 300 %

Approximate ballpark conclusion - cost of living /wage~ X10–which translates. Into the cost of living-standard of living to have decreased tenfold since 1969.

These are not logical, but factual assertions.

Of course, this assumes that the capitalist doesn’t exert every effort to “fix” the game. Every large business does it’s level best to create a monopoly either on materials or services. What could be a consumer driven competitive edge is quickly turned into a binding contract, or shutting out any competition. Capitalism is NOT consumer driven. That is the lie of the so-called “free market”. Those who scream for free market are also those who do their level best to insure that their workers receive no more than survival wages. People who are paid a decent living wage have no need to borrow money. The secret to capitalist success is to ALWAYS keep workers in a need to borrow money just to live.

Right. And the trend is to get deeper and deeper in debt. That results in a kind of servitude. The service companies servicing the loans, the exorbitant credit card rates, brought on another crisis in bankruptcy laws: previous to the huge de capitalizations of people on the verge, it was probably a choice to restrict the amount of interest and penalties banks could charge for credit card debt, but they chose instead to relax bankruptcy requirements.

Also the tax code was revised, making the IRS more “forgiving”, giving the impression of increased tolerance toward tax related debt incurred persons.
How far this was from the truth! If they had not revised tax codes, and not given such incentives as the new policy of offering in compromise, for unforgiven tax, less money would have come into the treasury by far, because of the inability to satisfy large indebtedness. Better get some out than nothing made this obliging, altruistic looking act, a very good fiscal policy.

But the smart ones will borrow money and they will use it to their advantage.

No it isn’t. If the worker has to borrow just to live, then he won’t be able to buy products from the capitalist. The capitalist needs consumers and workers - consumers who have money and workers who need it. The worker has to have enough money to buy ‘stuff’ but not so much that he can avoid working.

Unless they are smart enough to know when the situation is not really in their control and thus will only win the game if desired by those who do control their situation.

I’m afraid tent was right about that one, with the exception that what he thinks is “capitalism” is actually just Socialism in disguise. In Capitalism, monopolies are expressly forbidden. The instant a monopoly is allowed, it instantly becomes socialism. America is filled with monopolies, merely disguised.

The effort to live in reasonable comfort, very far from total, is sufficient to provide more than enough security for an employer. People do not know what it is that is keeping them dissatisfied and uncomfortable, so they spend every penny they make just to hedge against “boredom”, never fixing it, merely masking it for a very short time, much like common disease treatments throughout the medical world - never cure, merely treat… for a price.

People would not borrow money? Why not?

That would mean that banks could go bankrupt and the savers would potentially lose all their savings. That’s risky for the saver.

Unless they are smart enough to realize that every aspect of life is not controlled by others - then they will sneak under the radar and borrow advantageously.

That entirely depends on where he is saving it.
… offshore works great.

Well yeah, IF they can “sneak under the radar”… Emm… have you any clue of the degree of surveillance going on in the US? They aren’t doing it for free.

If you are speaking of government force being used to create a monopoly, then that is not a criticism against capitalism, but socialism. Without government enforcing price-fixing schemes, such schemes always fall apart, as it is in the interest of each capitalist to cheat on the side. Furthermore, it is extremely difficult to have a monopoly of any kind, as one has to also eliminate foreign competition and technological advances and the use of substitutes. The people “screaming” for the free-market don’t do anything to fix wages at a low level. How could that even happen? Under capitalism, we have increasing wealth and better lives for people. Even a poor American is far better off than the richest monarch who lived 200 years ago. When the government interferes in the free market, like when it comes to fixing the price of money, that is when bad things happen, like run-away debt.

In a world economy, there will always be haves and have nots. Capitalists follow the cheapest labor markets possible and sell their products in the most affluent societies they can find. It’s musical chairs… There are always consumers somewhere just as there are cheap labor markets to exploit - somewhere. Capitalism dies if there were ever a balance between labor and consumer markets.

Government may be in collusion with capitalists, but government doesn’t initiate monopolies. Think about Monsanto “patenting” GMO seed and then forcing farmers to use only that seed in order to produce a viable competitive-priced crop. In fact, look at the whole issue of patents. Patents guarantee a monopoly for a set number of years. Look at the multitude of computer related lawsuits constantly in the courts as the biggies do everything they can to maintain a monopoly.

The free market people don’t do anything to fix wages a a low level??? Then why would outsourcing be so attractive to big business? It couldn’t be because they wish to exploit cheap labor, would it? Why is big business against raising the minimum wage in this country? Don’t they want people to have all that extra money so they can be consumers?