Sultan Knish
Debt is the surest and shortest path to a global
economy. Punishing all actors in local economies but those who are “too
big to fail” empowers “too big to fail” systems and “too big to fail”
economies. Encouraging debt and the eventual assumption of debt passed
on and commodified by increasingly larger political and economic
entities creates supraentities built on debt and dedicated to economic
regulation.
The assumption of state debts by the Federal government was a major step
in the federalization of the United States. The growing assumption of
micro and macro debts by the United States government and by
international bodies allows for greater macro and micro regulation of
economic activities.Rewarding and promoting
irresponsible economic behavior creates debt which creates opportunities
for intervention. Individuals are encouraged to engage in irresponsible
day to day consumer spending and large scale home and college loans.
Financial institutions package irresponsible loans into commodities of
debt. Governments bail out financial institutions by amassing even more
debt to pay for the bailouts.
The buck keeps getting passed on
until everyone is in debt from the micro to the macro level, from the
citizen who has his own debts, the annual and the lifelong, and those of
the nation which he is also being taxed to repay, up to banks and
governments, where the same experts move imaginary numbers around until
everyone is in debt and also a debt holder and then a global state of
debt has become universalized.
The universalization of debt leads
to the universalization of economic authority and eventually planned
economies. By indebting everyone from the individual to the government,
everyone is forced to maintain a bankrupt and broken system. Debts are
obligations. Obligating everyone to the same system forces everyone to
comply with the system.
Interlinked economies are more unstable
and require more regulation. Interlinked national economies become
regional economies with common regional regulations imposed on multiple
countries. And regional economies link in to a global economy which
requires universal global economic regulation of all actors from the
lemonade stand to the multinational bank to maintain centrally planned
targets.
Growing instability is met with tighter regulation
leading to the increased power of oligarchies who regulate the system
and the diminishing freedom of individuals. Every action taken to create
greater security and stability for the oligarchy has the net effect of
subtracting from the economic freedom of all smaller actors.
As
debt gets passed up the system from the micro to the macro like a spark
of electricity, the assumption of failure becomes institutionalized.
Encouraging individuals, banks and governments to fail becomes a pathway
for larger entities to capture smaller entities and for smaller
entities to capture individuals. Irresponsible spending is promoted from
the top down and captured from the bottom to the top so that larger
entities promote irresponsible economic behavior and by accepting the
consequences of that behavior take on the political and economic power
of that assumption until the global economy is one great totalitarian
welfare state built on subsidies and debt.
Financial institutions
gain by encouraging consumer irresponsibility. Governments gain by
encouraging irresponsible behavior by financial institutions. Global
entities gain by encouraging irresponsible behavior by governments.
Responsibility is traded for freedom, but individuals, institutions and
governments, who give up freedom of action in exchange for being able to
pass their responsibilities up the ladder, are participating in a shell
game.
Responsibility is being passed up the ladder, but
accountability isn't. Larger systems cost more and distribute that cost
widely. Endowing larger systems with responsibility universalizes the
obligations of that system. Passing debt upward to national and global
institutions means turning nations and global bodies into collection
agencies which distribute the obligation of that debt in accordance with
their own social and political agendas.
The obligations
themselves cannot be escaped; only the direct responsibility for making
the difficult decisions can be passed upward along the chain. If the
frogs don't want to make their own decisions then they elect a king who
makes all their decisions for them. The assumption of debt elects kings
who decide how the debt must be repaid and who is first in line to
collect and who is first in line to pay.
Larger systems do have
more resources to tackle a problem than smaller ones, but those
resources are less efficiently managed. When it comes to the individual
distribution of those resources, the larger system has less to offer
than the smaller one. All that it really offers is the evasion of
responsibility.
When failure is institutionalized then the primary task of each failing
system is the evasion of responsibility. Institutionalizing failure also
universalizes failure so that no one is responsible, but everyone is
responsible. No single person, company or government can be assigned the
blame, but all of them are obligated to pay upward into the larger
system which has assumed the debt.The universalization
of debt breaks the direct connection between debtor and debt holders,
both the real one and the moral one. Class warfare colludes with debt
collector economics to go after the most prosperous individuals and
nations first. And then down the line so that those who amass the most
debt are also the last to be asked to pay it. This institutionalization
of failure rewards failure economies and implements feudalism with those
who have the most accepting responsibility for the welfare of the serfs
and implicitly gaining power over them. The more the serfs run up debt,
the more the power of the barons grows. This is a formula for mutual
resentment and class warfare.
The broken connection hides the
forms in which debt is collected as the assumption of failure requires
higher taxes and more structured systems that deprive people of economic
freedom without alerting them to the real reasons why this is done. The
institutionalization of failure raises the cost of every part of the
institution that engages in the assumption of failure. This cost is
universalized to hide its sources.
Protecting the sources of
failure is a primary goal of those who benefit from institutionalizing
and universalizing failure. If the failure sources are addressed,
isolated and treated then smaller systems and actors will reclaim
economic responsibility robbing larger systems of their regulatory
power. Creating entire sectors dedicated to economic irresponsibility in
the name of greed and idealism is a means of weakening smaller systems
and individuals in order to subsume them into a global failure economy.
Every
local failure where the responsibility remains localized creates a
mandate for local regulation, whether it is the individual regulating
his own spending or the municipality or company learning the lessons of
their own setbacks or governments addressing their own monetary policy.
However every local failure where the loci of responsibility are passed
upward creates mandates for regulation at the level to which that
responsibility has been passed on to.
The assumption of debt
increases regulatory mandates to the highest level of its assumption.
And as the mandates increase they tip from regulating risk to mandating
activity much like the way that universal health care went from offering
health care to mandating health insurance purchases. The federalization
of power reduces the natural limits of that power. Expanding economic
authority within a central system leads to a planned economy.
The
more debt is assumed, the more authority is assumed. Maximizing debt
also maximizes and centralizes control over spending. Central planning
reduces economic flexibility and diversity in order to meet target goals
which can never be met because the very system created to meet them is
incompatible with the efficiency and productivity necessary to achieve
them.
An ever more expensive system that produces ever diminishing
results and warps the economy around itself creates another economic
black hole. It's an economic black hole whose event horizon could be
seen in the declining days of the Soviet Union when the failure of the
agricultural collectives took it deep into debt buying American wheat or
in the Obama Administration’s obsession with government stimulus plans
to revive an economy even as that spending is pushing the country closer
to default on its debts.
Grandiose political and economic systems
come wrapped in ideologies that reinforce assumptions about an ideal
state of human behavior. A state which does not exist in the real world.
Drawing links between an ideal state of behavior and an ideal economic
state inevitably results in ideologically driven economic disasters as
leaders and regulators assume that enforcing and enacting ideal behavior
will yield an ideal economy.
The cloistered nature of central
institutions makes them all the more vulnerable to ideological mapping.
Ideologies thrive in hothouse atmospheres alienated from the real world
where the ideal is easily mistaken for the real and passion for castles
in the sky construction outweighs the mud and dirt challenges of
building actual structures. The further an institution is detached from
the consequences of its policies, the less capable it is of experiencing
negative feedback and the less reliable the reports that reach it are.
When failure comes it is never attributed to the ideology or to the
entire structure, rather to a failure of comprehensive control. Each
attempt at deepening control expands the system that is the cause of the
problem and deepens the level of failure in areas affected by the
system. The more the ideal is pursued, the more the real declines until
the entire system implodes with devastating consequences.Having
exploited the failure of the preexisting systems to amass authority and
responsibility within a centrally planned economy, the failure of the
central system destroys the decision making capacity for all areas under
its responsibility. A central system creates a culture of failure by
robbing individuals and smaller entities of power. When it gives out,
the smaller entities have lost their capacity for making their own
rational economic decisions and have to start from scratch. Having
turned everything under its control into one giant welfare prison where
the inmates are cared for by the nanny state, the collapse of the system
leaves the inmates, whether they are individuals, municipalities or
nations with no available skills to care for themselves.
The
economics of planned global failure threaten to repeat the consequences
of the decline and fall of the Soviet Union on a global scale. While
such a system is never likely to successfully come into being, it has
been the long term progressive aim throughout the twentieth and now the
twenty-first century. It is now closer to coming into being than at any
time before. The distillation of free market economics into the crony
capitalist corporation which looks to the government to take care of the
messes It makes even as it campaigns for a borderless world is tipping
the globe closer into the black hole of a planned global economy where
universal debt leads to universal power and universal failure.
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