>Max, I saw your petition, and I need education, from you
>or anybody who cares to help me out. Why not
>pay down the national debt? As I read your petition the
>objection is that the public money would not be available
>for infrastructure and social needs. OK. But I remember
>reading in Galbraith's _Money_ someplace that according
>to Keynes the debt contracted in stimulating a depressed
>economy was supposed to be paid down once the economy
>got better.
I think that the reduction of the national debt is one of the strategically progressive but politically obscure goals of the reformist governments of Clinton and Blair. In the UK Gordon Brown as Chancellor is on the record many times about the merit of paying off chunks of the national debt. He publicises this as part of an image of making him seem sound in capitalist terms. But the argument is given also about the benefits of reducing annual expenditure on interest payments to the tune of billions of pounds a year (sorry figures not to hand).
I think strategically that is progressive as I have argued in my articles on the unusual economic situation in Hong Kong, which I know some have considered eccentric. All sorts of other capitalist evils may flourish, but it is not necessary for a modern competitive capitalist state to divert 5-10% (I am guessing) of its surplus to interest payments to coupon clippers. That is so even if some of the clippings actually go towards financing insurance and pension provision for the population as a whole.
It is important to assess the implications of this change in overall class terms over 25 - 50 years, and not from a short-term economist point of view. (I am thinking of Lenin's use of the word 'economist' - I am not disparaging thoughtful and progressive economists some of whom contribute to this list!).
The catch in Brown's finances on which I would like comment is the PFI - the Private Finance Initiative. This morning Brown's Treasury can boast a surplus of 12 billion pounds (newsclip of a tall somewhat rotund Brown striding confidently across a courtyard). It has been suggested to me though, that the use of private finance under PFI (invented by the previous government) is mortgaging the stock of new hospitals, schools etc, and that is one of the ways Brown has been able to reduce the national debt. Laundering it.
How true is this criticism? I am looking for comments that are not purely polemical.
Chris Burford
London