Media pundits, economists, and politicians claim that the current level of public indebtedness in the U.S. and its further expansion are “unsustainable.”
Seemingly, “our” profligacy is catching up with us. The day of reckoning approaches. We should either prepare for a drastic decline in social welfare tomorrow or accept a worsening of the economic situation today — e.g. the government should limit its meager “stimulus” spending and allow the economy to slip into greater joblessness to prevent the looming catastrophe. The crisis in Greece, that many commentators attribute to a borrowing binge by the Greek government, is now being alluded as exhibit 1. It won’t take long before they use the current anxiety in financial markets as exhibit 2. The usually lucid Arianna Huffington is now joining this parade of nonsense with her “Life in the Age of “Much Worse Than We Thought It Would Be”” (http://huff.to/bu0txF).
Economists, of course, will pretend that fundamental scarcity — i.e. the fact that society’s total labor time and its productive force are never infinite — is at the root of the dilemma. Society’s cake is finite, and one cannot eat it and have it at once. Except that this is a false premise. The public debt (or the private debt, for that matter) has absolutely nothing to do with the finiteness of society’s resources and productive possibilities. It’s not nature but social convention or, more precisely put, social structure.
Public debt is not about the limited production possibilities of our society. Public debt is about how the wealth that exists (or will be produced) is (or will be) held — by whom and at whose exclusion. In other words, it is about how the ownership over existing wealth is distributed. It’s about who owns today’s wealth and, hence, holds the enforceable claims over future production flows. It is not about how large these flows can be with existing resources and productivity. Wealth distribution is a social condition, not a fact of nature. It is entirely within the reach of human capabilities to alter the form in which wealth ownership is distributed.
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