- 27 Dec 2011 12:01
#13859587
Yea, there'd definitely be an increase of government debt. He directly says it would be funded by a deficit where everyone would receive a subsidy that's mandated to pay off debt first.
What I don't get is his comment on cash flows. If a bank is receiving interest payments on a regular basis, that's going to be a lot less than if it receives all of its principal paid off all at once. The short term cash flow problem wouldn't exist at all, and if anything, it would put people back in good standing such that loans could be made again. It'd sort of be like refinancing.
I'm also sorely disappointed by his brushing away of the moral hazard point in regards to how this needs a systemic approach. It makes you wonder what his personal background is and whether or not he agreed to be interviewed out of spite. His argumentation technique is completely loaded with self-fulfiling prophecy and confirmation bias too, and his pleasant tone of voice makes him come off as a total jerk.
Pretty much, he shouldn't be listened to by anyone with any sense of responsibility. The only people who would want to listen to him are those who want to CLAIM they're socially responsible, but in reality, couldn't care less about holding people accountable for their individual objective and quantified judgments on how to live their lives. Over and over again, he excuses borrowers and labels creditors as parasites, never actually considering that borrowers are people with their own rationality.
It's really no surprise that he emphasizes NOT distinguishing between good and bad debt. Heck, he doesn't even distinguish between technological investment and speculation, nor does he suggest a method for preventing debt financing of speculation.
It's just a ratings ploy, but what's really sinister is his nonchalant suggestion of violence. If that's not despicable and taking a posh life for granted, what is? It's like he's saying, "Wipe out debt, or take the chance of getting beat up."