Okay. This is a crazy idea. I don't think it could ever be implemented because it would just take too much co-operation and way too much guts.
What if we just forgave, dissolved, disappeared all debt. I mean ALL debt - sovereign, personal, business, mortgages, the whole shebang.
Over the past 50 years, there is a huge amount of 'paper' wealth that has been developed and leveraged into 'real' wealth. But what does it really mean? How many countries owe money versus are owed money and the same goes down the whole line for businesses, and people. Let's reset to zero.
Here is how I see it. On a personal level, the banks end up out of business. So all my debt is gone and with it, all my savings too. Well for the vast majority of people, they are better off. I now own my home outright as well as my car and my credit cards are paid off. The credit cards are also no good, because the credit card companies went under when their assets disappeared, but....who cares. In the long run aren't we better off?
For businesses, any money on their operating lines of credit, or monies they have borrowed is now wiped out. They just got a freebee (probably used to those) now, any cash balances or monies owed to them are also gone, but on a net-net basis, they are probably okay and if their business model is at all sustainable, most businesses will do okay. Maybe the execs won't be able to get huge bonuses the first year or two, but hey, this would be a great opportunity to see if they are worth it.
For countries, most will end up ahead. If all the countries, states, provinces in the world suddenly have their sovereign debt vanish they can go back to square one and hopefully learn from their mistakes.
In many countries, the existing tax base is designed to service the debt and try to provide service. Just figure out where the federal government in the US would be if the debt service costs vanished.
I know it is a crazy suggestion, but I'm interested in your thoughts. If all you want to do is say I'm some sort of neo-socialist, liberal hack, and nothing else, keep it to yourself. tell me I'm wrong and telly me why. Tell me I'm wrong and tell me what would work.
thanks.