On Feb 12, 2008, at 5:12 PM, Max B. Sawicky wrote:
> There is current debt and debt not yet incurred. Austerity
> entailing less new debt favors current debt holders. O'Connor's
> point implies no distinction, just capital seeking to increase its
> hold on the Fisc by increased indebtedness. Which is it?
Huh? Rising indebtedness is an easy way out for the short-term, and the fucking bond traders generally go along, but over the longer term, capital will eventually put the squeeze on. I.e., at some point they will demand either much higher interest rates or shut the flow off completely. The refusal to roll over old debt is what threw NYC into crisis in 1975. Obviously a national gov is in a stronger position than a municipal gov, but the rule will apply even to a megapower eventually.
Doug