Category Archives: Latvia

Debt Defaults, Austerity, and Death of the “Social Europe” Model – Hudson_KPFA_Europe2011.mp3 (audio/mpeg Object)

Excellent interview with Bonnie Faulkner.

Topics covered: Financial and fiscal austerity policies; the appeal of economic austerity to bankers; economic depression and war; post-WWII vs. post-cold war economic policy; government to government grants vs. commercial lending; the euro and dollar; privatization in New Zealand and elsewhere; social unrest; speculation and prices; criminalization of the economy; impoverishment of the US.

Hudson_KPFA_Europe2011.mp3 (audio/mpeg Object).

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The Spectre Haunting Europe | Michael Hudson

Without public investment, how can they become competitive? The traditional path is for mixed economies to provide public infrastructure at cost or at subsidized prices. But if governments “work their way out of debt” by selling off this infrastructure to buyers (on credit whose interest charges are tax-deductible) who erect rent-extracting tollbooths, these economies will fall further behind and be even less able to pay their debts. Arrears will mount up in an exponential compound interest curve.

The EU’s creditor nations and banks are seeking to resolve the crisis in way that will not cost them much money. The best hope, it is argued, given the inability of the crisis countries to depreciate their currencies, is “internal devaluation” (wage austerity) on the Latvian model. Bankers and bondholders are to be paid out of EU/IMF bailout loans

via The Spectre Haunting Europe | Michael Hudson.