This mad piece of late-night whimsy may not be totally mad - think of the practical benefits but start with what’s going to happen if nations have to deal with the crisis nationally, In a nutshell
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...the World economy is going to be tanked by Covid 19; whatever is done on a national level there will be a legacy of misery & debt which will put financial pressure on individual countries. Increases in debt repayments will drive taxes up, quality of services down.
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... If there’s an international rebalancing however, international debt is wiped out without a loss to creditors. I’ve acknowledged that would normally result in economic overheating but the measures to cope with the virus should dampen much of that. This would mean:
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...Specifically in relation to the virus:
1) Internationally measures to combat it could be as draconian as they needed to be because cost would not be tempering the response and
2) within individual countries, the aid provided could be more generous
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1) Internationally measures to combat it could be as draconian as they needed to be because cost would not be tempering the response and
2) within individual countries, the aid provided could be more generous
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...Other benefits would be
3) Not only could Third World debt be eliminated, so could First & Second World debt (think not only to the benefits to the U.K. but to countries like Greece, Spain & Italy)
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3) Not only could Third World debt be eliminated, so could First & Second World debt (think not only to the benefits to the U.K. but to countries like Greece, Spain & Italy)
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4) Brexit negotiations would be much simplified, the EU could name a figure the U.K. accepts it, the EU gets the payment credited, but the actual payment from the U.K. is written off.
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4) Brexit negotiations would be much simplified, the EU could name a figure the U.K. accepts it, the EU gets the payment credited, but the actual payment from the U.K. is written off.
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...domestically
5) Without debt repayments:
a) health can be better funded
b) ditto education
c) student loans can be abolished & existing loans written off
d) banks are recapitalised
e) individual debt is reset to zero
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5) Without debt repayments:
a) health can be better funded
b) ditto education
c) student loans can be abolished & existing loans written off
d) banks are recapitalised
e) individual debt is reset to zero
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f) the housing sector can be sorted out, cladding replacement & leasehold enfranchisement, costs are capitalised, so a payment is made but written off as against the paying parties, all leasehold ground rents are reduced to a peppercorn.
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f) the housing sector can be sorted out, cladding replacement & leasehold enfranchisement, costs are capitalised, so a payment is made but written off as against the paying parties, all leasehold ground rents are reduced to a peppercorn.
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g) essentially healthy companies burdened by historic debt are revitalised.
h) expensive PFI costs are capitalised the PFI founders paid off & PFI buildings pass into public ownership.
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g) essentially healthy companies burdened by historic debt are revitalised.
h) expensive PFI costs are capitalised the PFI founders paid off & PFI buildings pass into public ownership.
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... all of this is a crazy pipe dream for a single country but as a response to a Worldwide crisis, if every country were to do it, simultaneously, it could be pulled off. I appreciate there would be undeserving beneficiaries & sundry abuses but ...
... the benefits of a global debt reset would be huge & probably only a global crisis would give the world the opportunity to try it.
END OF DAYDREAM.
END OF DAYDREAM.
#COVAID For some reason the original thread dropped off from the longer musing this morning: threadreaderapp.com/thread/1243002…
