Until recently (1869 in the UK), Debtor's prisons were common. The logic was simple: bad people should pay for their sins by forfeiting their liberty. There was only one problem with this logic: it didn't work. It only made society at large feel self-righteous. It didn't keep people from going hopelessly into debt: there is no way stupidity can be cured - on the debtor or the lender side of the equation.
Indeed, in our time indebtedness, at all levels, has become the basis of our economy. This may be utter stupidity, but if it is, it is widespread. The cure was supposed to be credit ratings: lenders would only give loans when they were likely to be paid back, and the credit agencies were supposed to give accurate reports about this. You know what happened: greed triumphed over all, because making bad loans was so profitable. Was this idiotic? Of course, but idiocy has become so common it was not noticed.
I have stated in another posting that Society has Become Evil. Perhaps I have exaggerated: society has only become stupid - but the end result is much the same.
In this light, consider this part of of an article in Truthout: The Road Less Traveled: Saying No to the IMF. I quote:
Standing up to the IMF is not a well-worn path, but Argentina forged the trail. In the face of dire predictions that the economy would collapse without foreign credit, in 2001, it defied its creditors and simply walked away from its debts. By the fall of 2004, three years after a record default on a debt of more than $100 billion, the country was well on the road to recovery; and it achieved this feat without foreign help. The economy grew by 8 percent for two consecutive years. Exports increased, the currency was stable, investors were returning and unemployment had eased. "This is a remarkable historical event, one that challenges 25 years of failed policies," said economist Mark Weisbrot in a 2004 interview quoted in The New York Times. "While other countries are just limping along, Argentina is experiencing very healthy growth with no sign that it is unsustainable, and they've done it without having to make any concessions to get foreign capital inflows."
Weisbrot is co-director of a Washington-based think tank called the Center for Economic and Policy Research, which put out a study in October 2009 of 41 IMF debtor countries. The study found that the austere policies imposed by the IMF, including cutting spending and tightening monetary policy, were more likely to damage than help those economies.
The article goes on to say that Dubai has followed suit, and the sky has not fallen in. Greece, Iceland and Latvia may do the same - rather easily. Basically, you make your own currency, and carry on - much as China has done. Relying on the IMF, which is only interested in taking care of the rich countries, at the expensive of everybody else, has been a disaster.
The solution is to work both ends against the middle: reestablish good credit ratings, and forgive debts that cannot be paid. There is no other way out.

Liberals are Useless
Chris Hedges in Truthdig
The photo is of a German woman buying a box of candy with Obama's picture on it.
He goes on to say:
He is referring to his fellow liberals here.
I have Chris Hedges latest book: Empire of Illusion, the end of literacy and the triumph of spectacle. Like many others, he describes the pickle we are in. But he doesn't back off enough to get an historical perspective on how we got here.
Neil Postman, who followed in the footsteps of Marshall McLuhan, did a much better job of this. He masterpiece was Amusing Ourselves to Death (1985). It was translated into eight languages and sold 200,000 copies worldwide - but has since has been smashed by the landslide he warned us about: television culture.
Posted at 07:18 AM in Books, Economy, Obama, Political comment | Permalink | Comments (0) | TrackBack (0)