Debt/GDP in the U.S. was 114% after WWI, declined steadily to under 30% by late 1970's. Starting with Reagan tax cuts in '81, it rose to between 45 and 50%. Last few years it has been sinking again. There had been capital inflows for much longer than the recent period of decline. Plus real interest rates are not especially low now. So there seem to be problems with your 'sad truth.' I'd say the rise in debt/GDP was narrowly political-- the determination of the Right to shrink government by sabotaging the revenue system--as opposed to a figment of deep political-economy.
So the sustainability of a more moderate rise in debt/GDP, and certainly one confined to counter-cyclical purposes, is still plausible.
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. . .
"State induced production is funded through taxes or deficit spending
(deficits which must be repaid at some point, mostly by future taxes). This
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Deficits need never repaid; only refinanced.
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is a process of an exchange of revenue for labor power, not an exchange of
variable capital for value creating labor power. Present or 'future'
surplus value is appropriated from private capital by the State, in the
form of taxes or loans, to pay for these expenditures.
"In other words, the products which the govt 'purchases' are not really
purchased, but given to the govt free, for the govt has nothing to give in
return but its credit standing which in turn has no other base than govt's
taxing power andits ability to increase the supply of credit money through
the manipulations of interest rates by the Fed Reserve Board.
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Hence the magic of Keynesian economics!
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"...the products produced for the govt do not function as commodities, and
hence, they cannot function as capital. They are produced directly for one
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There is a lot of public capital -- about 20-30% of the total capital stock, and that's just the tangible stuff, not the 'human' capital. This functions as capital in the sense of boosting public and/or private output.
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consumer, never entering the commodity market. They are purchased with
revenue, which in reality consists of surplus value already produced (or to
be produced, in the case of deficit spending) by private capital. State
expenditures therefore cannot direclty add to the mass of social surplus
value. ...
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I still don't think this hangs together.
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"There is no doubt that State intervention increases production and thus
expands the productive apparatus, allowing the utilisation of means of
production which would otherwise be idle and the employment of workers who
would otherwise be out of work. However since the problem of capitalist
production is not just the utilisation of means of production and the
employment of labor power, but the creationof a mass of surplus value
adequate to ensure continued accumulation of capital, and sicne govt
induced proudction is not productive, does not yield surplus value, but
only produces goods and services which are not thrown on the market, such
production production cannot alleviate the fundamental problems of
capitalist production"
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This is repetitious and sounds wrong for the same reasons as above.
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By the way, I would imagine that as capital inflows slow and commodity
prices recover, leading to rising costs and the need to cut them through
greater economies of scale, US capital will find itself unable to rely on
the effective demand created by its own accumulation and hitherto provided
by an indebted govt and thus find itself in a world wide struggle for
export share as compensatory effective demand. This will give rise to an
intensification of Brenner's kind of inter imperial rivalry and further
destabilisation in the major currency markets. The darkest sides of
globalisation are yet to be seen.
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This is a different story to me and has some resonance. I could interpret U.S. capital flight as a search for more profitable opportunities, abetted by deprivations of basic human rights (such as in, say, the PRC). Social dislocations resulting from over-extension and collapsing bubbles in such places as Indonesia are sufficiently removed from the 'core' as to make for a system that could last forever. In this way, capital exports the social risk to its own perpetuation, and can even get its losses subsidized.
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To some extent, American capital may win this struggle but only at the
great expense of production elsewhere and rationalisation, unemployment,
wage constraints and speed ups domestically. However unpleasant the
conclusion, there is indeed simply no escape from general crisis conditions
for the working class within the capitalist mode of production even if
regulated in benevolent technocratic fashion. The working class is
confronted with the task of its own self emancipation or global barbarism.
Ever since Rosa Luxemburg, the achievement of this understanding represents
the mark of a revolutionary (mine is at best rudimentary); it must be
deepened at all times by the best and toughest minds among us. It is more
than pleasant that Daniel Singer ends his latest book with stirring quotes
from her.
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We are not seeing unemployment and wage constraints these days. I can't speak on speed-up.
On the other hand, there is stuff from Keynesians now on how the current boom MUST end relatively soon.
My cracker-barrel wisdom in response is to put less hopes in theory and more in ways of addressing the lack of perceived crisis.
mbs