About 140 global organizations and charities are calling for a worldwide Debt Jubilee to avoid some of the world’s poorest countries from collapsing into chaos amid the COVID-19 crisis, reported BBC News.
The British-based Jubilee Debt Campaign is leading the movement ahead of the G20 meeting this week.
“Developing countries are being hit by an unprecedented economic shock, and at the same time face an urgent health emergency,” said Sarah-Jayne Clifton, director of the Jubilee Debt Campaign.
“The suspension on debt payments called for by the IMF and World Bank saves money now, but kicks the can down the road and avoids actually dealing with the problem of spiraling debts.“
Clifton is urging for the immediate cancellation of 69 of the world’s poorest countries’ debt payments this year, which would free up at least $25 billion for the countries in 2020, and up to $50 billion if the jubilee was extended to the end of 2021.
“This is the fastest way to keep money in countries to use in responding to Covid-19, and to ensure public money is not wasted bailing out the profits of rich private speculators,” added Clifton.
The latest call for a Debt Jubilee should come as no surprise to ZeroHedge readers.
Over the last several decades, governments across the world have added insurmountable debts, leadingBill Buckler via The Privateer to say back in 2012 that the world has dived down a deep hole and into a trap that has “ensnared Japan more than two decades ago.”
And maybe Buckler’s Japanification fears for the rest of the world were right, because eight years later in 2020, central banks across the globe are still trying to print themselves out of a recession and or depression and into prosperity. And look at how it turned out for Japan, quantitative easing has failed and will continue to fail.
The problem today is that can-kicking yesterday’s problems has reached its limit.
Over the last several decades, governments across the world have added insurmountable debts. Sprott Money points out that debt-loads exceed 100% of GDP in many countries. The “ever-worsening indebtedness, and ever-larger interest payments on these unpayable debts, the precise definition of Debt Slavery. Throughout virtually the entire Western world, we are now well past this point-of-no-return,” warned Sprott Money.
This debt slavery has also become evident in emerging markets where countries are experiencing collapsing currencies, commodity prices, export earnings, and service and tourism revenues threaten to send many governments into default.
But calls for a Debt Jubilee are not limited to just emerging markets, but also developed economies. We noted several years ago that over the last 15 years, American consumers have taken out student loan debt, credit card debt, medical debts, personal loan. On a sovereign scale, the national debt is exploding, underfunded pension liabilities are rising, and Medicare costs are soaring.
The issue with both emerging and developed markets is how to manage all this debt as the virus has exposed the fragility of the financial system, with possible financial Armageddon nearing as world trade collapses.
And after decades of “kicking the can down the road” – it appears the piper finally wants his money. And why the talk of Debt Jubilee is starting to gain traction.
For some historical context of a Debt Jubilee, here is The Hutch Report’s take:
“Historians have counted around thirty episodes of general debt cancellations from 2400 to 1400 BC, noting they were occasions of great festivity which often involved the physical destruction of the tablets on which liabilities were recorded. One of the most famous episodes of debt forgiveness comes from ancient Babylon (modern-day Iraq). In 1792 BC, the self-proclaimed King Hammurabi of Babylon forgave all citizens’ debts owed to the government, high-ranking officials, and dignitaries.”
“Debt forgiveness was also practiced during the time of the Old Testament. In Jewish Mosaic Law, every seventh Sabbath year saw the wiping away of all debts, where creditors cancelled all the obligations of their fellow Israelites. Every 49th year (seven Sabbath years) was the ‘Year of the Jubilee’ when freedom from all debt and servitude was proclaimed throughout the land.”
Paul Craig Roberts has routinely pointed out that America is in dire need of a Debt Jubilee as wealth inequality is at extremes and insurmountable debts are mounting, rendering society unstable. In periods of economic collapse, like what is unfolding across the country today, the risk of a “social bomb” could be imminent.
To resolve the possibility of a nation imploding, Buckler, in 2012, said a modern Debt Jubilee is characterized as “quantitative easing for the public.” And now that MMT and helicopter money has become de rigueur, why not push the endgame of monetary malarkey – a global debt jubilee.
Oh, and remember the trillion-dollar-platinum-coin idea…