, Gloucester, MA


January 24, 2013

My View: Tackling the debt crisis

Like the glass ceiling, the debt is a crystal ceiling that one can see. Yet, countervailing forces deny its very existence.

Worse, being a crystal ceiling, words do not help to define the problem and solutions multiply.

It is true that national budgets are not the same as family budgets. The reason is that the government can create money.

But on which basis does this happen; is it truly thin air? Together with Stuart Weeks, I was sitting down with Professor Galbraith once. Soon after he coiled down to kindly try to reach my height, I told him that one of the fundamental rights to which my research pointed is the right of access to national credit.

“What do you mean by national credit,” he asked in his gravelly voice. Keep in mind that he had just published a book titled “Money.” I was truly scared. If he does not know what national credit is, who will ever understand?

I said, “National credit is the power to create money.”

“I like the direction of your thrust,” he thundered back.

That is the basis on which money is created: national credit.

We must be clear about that. And we must be clear that the value of national credit is created not by the glitter of Wall Street, but by the blood, sweat, and tears of all the people of the nation; indeed, we must also be clear that, since over 70 percent of the value of the gross national product is given by the value of consumer goods, then the poor contribute to that value with mouths to be fed and backs to be clothed.

The light comes, not from economics, but from the law. And economists, in search of pure science, do not commingle with lawyers and political scientists. But then they end up talking to themselves, and economics, as widely realized today, becomes irrelevant.

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