http://www.bcg.com/documents/file87307.pdf
The above link is to a paper put out at Boston Consulting Group (BCG). Survivors of business strategy lectures may remember their stars, cash cows, dogs and question mark portfolio management. The summary might read that our politicians aren't telling us the truth on world debt and are playing for time. The big problem is facing up to the facts. These facts have been known to some of us for a couple of decades and in more ideological form since 1900. The US and Europe need to cut debt other than through IMF austerity lunacy by amounts so large most banks will be bankrupt and their shareholders left with whatever market value left. The banks would go into temporary nationalisation to be cleaned up and set back on truly regulated keel. A lot of debt will just have to be written off, as in cutting what's owed on mortgages and the rich will have to take a big haircut through assets taxes (one off). Names to look for if interested include Steve Keen and David Graeber. It's been established a long time that we haven't been growing much through work in 30 years,instead transferring investment to sweat shop economies and speculative bubbles including housing and organised crime banksterism. Our governments must know. So-called 'moal hazard' is involved in any solution to the mess - debts have to be forgiven and this raises the issue of rewarding daft or irresponsible borrowing. This feels wrong. I had an incidence with my grandson who put a month's allowance into buying a new guitar (Crafter - great tone) but turned up demanding it. He got a fiver, but should really have gone away empty handed. We could get in discussion on moral hazard, but we really ought to consider that the banks are duplicitous about it - they've been highly irresponsible and don't want to face the consequences any more than a poor family facing eviction and foreclosure. There are a lot of moral issues like this where we can establish the principle - but also see powerful groups evading the principle, often with threat that national or global collapse will occur if they are treated like everyone else. This is not capitalism under rule of law, or democracy but oligarchy. We are generally quick to scorn the spendthrift (as in that story on the grasshopper and ant), but what stops us getting after it on the massive scale of global banksterism? The facts are as clear as in the more or less neo-con BCG The only place, other than in detail, I disagree concerns the notion that uncompetitive countries should cut wages - we need Aa more complex formula that puts liquid assets (more or less cash) back in the hands of the less well off. Roughly, we have seen this decline from 14% to 1% in the bottom have-nots comprising 50% of our peoples. A return to this through New Deal work projects is needed. Substantial cowardice is involved in being prepared to slate peers for indiscretions and fall for the lies told by the powerful. And this is why I'm not a democrat. Our systems need to change away from this form of govern-mentality in which arguments are directed at ignorance to garner votes. But how can we do this without another form of elitism?
