The golden age of capitalism in the 50s and 60s had low levels of private debt, leading to comfortable spending and low finance costs. Now, rising interest rates, higher taxes, and stagnant salaries are reducing spending power. To solve this, a modern debt jubilee could be implemented, where everyone receives the same amount of money to pay down their debt. Those without debt can either spend the money or receive bonds. This would reduce private debt and income disparity.
We last had a financial crisis in 2008 (ignoring the pandemic years), and if we’re not in another crisis now, we’re well on the way to it, with mortgages rising, taxes increasing and the price of everything continuing to rise. Your spending power is being hit in three directions. But, isn’t that what central banks want? So we spend less and inflation comes down, theoretically. Yet the banks, who might not be to blame this time, are now feeling the hurt. In fact, they stand to gain from rising interest rates because they can raise their borrowing costs. This week Phil asks Steve, will the banks always win, come what may?
Hosted on Acast. See acast.com/privacy for more information.