Odd Lots Michael Hudson On Why The US Risks Becoming The Next Greece
Oct 12, 2020
Michael Hudson, a Professor of economics and expert on debt, discusses the looming threat of excessive private sector debt in the U.S. He argues that, unlike the past fears of becoming like Greece, the risk today lies in degraded consumption and investment. Hudson delves into historical perspectives on debt forgiveness, advocating for its importance in maintaining economic stability. He also highlights the need for public finance and critiques the U.S. approach compared to more effective systems like China's, raising alarms about potential austerity.
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Debt Cancellation Rationale
- Canceling debts, though radical, can restore economic normalcy after crises like pandemics.
- Not canceling debts can lead to property transfers to creditors, business closures, and economic decline.
Historical Debt Cancellations
- Hammurabi's laws canceled debts after 'acts of God' to prevent economic collapse and maintain social order.
- Similar debt cancellations occurred in ancient Rome to preserve military strength.
Modern Attitudes Towards Debt
- Modern resistance to debt forgiveness stems from unfamiliarity with history and its economic rationale.
- The left's lack of focus on finance and debt further complicates the discussion.