“Don’t Owe. Won’t Pay.” Everything You’ve Been Told About Debt Is Wrong
With the nation’s household debt burden at $11.85 trillion, even the most modest challenges to its legitimacy have revolutionary implications.
By Charles Eisenstein
August 24, 2015 “Information Clearing House” – “Yes” – The legitimacy of a given social order rests on the legitimacy of its debts. Even in ancient times this was so. In traditional cultures, debt in a broad sense—gifts to be reciprocated, memories of help rendered, obligations not yet fulfilled—was a glue that held society together. Everybody at one time or another owed something to someone else. Repayment of debt was inseparable from the meeting of social obligations; it resonated with the principles of fairness and gratitude.
The moral associations of making good on one’s debts are still with us today, informing the logic of austerity as well as the legal code. A good country, or a good person, is supposed to make every effort to repay debts. Accordingly, if a country like Jamaica or Greece, or a municipality like Baltimore or Detroit, has insufficient revenue to make its debt payments, it is morally compelled to privatize public assets, slash pensions and salaries, liquidate natural resources, and cut public services so it can use the savings to pay creditors. Such a prescription takes for granted the legitimacy of its debts.
Today a burgeoning debt resistance movement draws from the realization that many of these debts are not fair. Most obviously unfair are loans involving illegal or deceptive practices—the kind that were rampant in the lead-up to the 2008 financial crisis. From sneaky balloon interest hikes on mortgages, to loans deliberately made to unqualified borrowers, to incomprehensible financial products peddled to local governments that were kept ignorant about their risks, these practices resulted in billions of dollars of extra costs for citizens and public institutions alike.
A movement is arising to challenge these debts. In Europe, the International Citizen debt Audit Network (ICAN) promotes “citizen debt audits,” in which activists examine the books of municipalities and other public institutions to determine which debts were incurred through fraudulent, unjust, or illegal means. They then try to persuade the government or institution to contest or renegotiate those debts. In 2012, towns in France declared they would refuse to pay part of their debt obligations to the bailed-out bank Dexia, claiming its deceptive practices resulted in interest rate jumps to as high as 13 percent. Meanwhile, in the United States, the city of Baltimore filed a class-action lawsuit to recover losses incurred through the Libor rate-fixing scandal, losses that could amount to billions of dollars.
And Libor is just the tip of the iceberg. In a time of rampant financial lawbreaking, who knows what citizen audits might uncover? Furthermore, at a time when the law itself is so subject to manipulation by financial interests, why should resistance be limited to debts that involved lawbreaking? After all, the 2008 crash resulted from a deep systemic corruption in which “risky” derivative products turned out to be risk-free—not on their own merits, but because of government and Federal Reserve bailouts that amounted to a de facto guarantee.
The perpetrators of these “financial instruments of mass destruction” (as Warren Buffett labeled them) were rewarded while homeowners, other borrowers, and taxpayers were left with collapsed asset values and higher debts.
This is part of a context of unjust economic, political, or social conditions that compels the debtor to go into debt. When that injustice is pervasive, aren’t all or most debts illegitimate? In many countries, declining real wages and reduced public services virtually compel citizens to go into debt just to maintain their standard of living. Is debt legitimate when it is systemically foisted on the vast majority of people and nations? If it isn’t, then resistance to illegitimate debt has profound political consequences.
This feeling of pervasive, systemic unfairness is palpable in the so-called developing world and in increasing swathes of the rest. African and Latin American nations, southern and Eastern Europe, communities of color, students, homeowners with mortgages, municipalities, the unemployed … the list of those who strain under enormous debt through no fault of their own is endless. They share the perception that their debts are somehow unfair, illegitimate, even if there is no legal basis for that perception. Hence the slogan that is spreading among debt activists and resisters everywhere: “Don’t owe. Won’t pay.”
Challenges to these debts cannot be based on appeals to the letter of the law alone when the laws are biased in favor of creditors. There is, however, a legal principle for challenging otherwise legal debts: the principle of “odious debt.” Originally signifying debt incurred on behalf of a nation by its leaders that does not actually benefit the nation, the concept can be extended into a powerful tool for systemic change.
Odious debt was a key concept in recent debt audits on the national level, most notably that of Ecuador in 2008 that led to its defaulting on billions of dollars of its foreign debt. Nothing terrible happened to it, setting a dangerous precedent (from the creditors’ point of view). Greece’s Truth Commission on Public Debt is auditing all of that nation’s sovereign debt with the same possibility in mind. Other nations are likely taking notice because their debts, which are obviously unpayable, condemn them to an eternity of austerity, wage cuts, natural resource liquidation, privatization, etc., for the privilege of staying in debt (and remaining part of the global financial system).
In most cases, the debts are never paid off. According to a report by the Jubilee Debt Campaign, since 1970 Jamaica has borrowed $18.5 billion and paid back $19.8 billion, yet still owes $7.8 billion. In the same period, the Philippines borrowed $110 billion, has paid back $125 billion, and owes $45 billion. These are not isolated examples. Essentially what is happening here is that money—in the form of labor power and natural resources—is being extracted from these countries. More goes out than comes in, thanks to the fact that all these loans bear interest.
What debts are “odious”? Some examples are obvious, such as loans to build the infamous Bataan Nuclear Power Plant from which Westinghouse and Marcos cronies profited enormously but which never produced any electricity, or the military expenditures of juntas in El Salvador or Greece.
But what about the huge amount of debt that financed large-scale, centralized development projects? Neoliberal ideology says those are to the great benefit of a nation, but now it is becoming apparent that the main beneficiaries were corporations from the same nations that were doing the lending. Moreover, the bulk of this development is geared toward enabling the recipient to generate foreign exchange by opening up its petroleum, minerals, timber, or other resources to exploitation, or by converting subsistence agriculture to commodity agribusiness, or by making its labor force available to global capital. The foreign exchange generated is required to make loan payments, but the people don’t necessarily benefit. Might we not say, then, that most debt owed by the “developing” world is odious, born of colonial and imperial relationships?
The same might be said for municipal, household, and personal debt. Tax laws, financial deregulation, and economic globalization have siphoned money into the hands of corporations and the very rich, forcing everyone else to borrow in order to meet basic needs. Municipalities and regional governments now must borrow to provide the services that tax revenues once funded before industry fled to the places of least regulation and lowest wages in the global “race to the bottom.” Students now must borrow to attend universities that were once heavily subsidized by government.
Stagnant wages force families to borrow just to live. The rising tide of debt cannot be explained by a rising tide of laziness or irresponsibility. The debt is systemic and inescapable. It isn’t fair, and people know it. As the concept of illegitimate debts spreads, the moral compulsion to repay them will wane, and new forms of debt resistance will emerge. Indeed, they already are in places most affected by the economic crisis, such as Spain, where a strong anti-eviction movement challenges the legitimacy of mortgage debt and has just gotten an activist elected mayor of Barcelona.
As the recent drama in Greece has shown us, though, isolated acts of resistance are easily crushed. Standing alone, Greece faced a stark choice: either capitulate to the European institutions and enact austerity measures even more punishing than those its people rejected in the referendum or suffer the sudden destruction of its banks. Since the latter would entail a humanitarian catastrophe, the Syriza government chose to capitulate. Nonetheless, Greece rendered the world an important service by making the fact of debt slavery plain, as well as revealing the power of undemocratic institutions such as the European Central Bank to dictate domestic economic policy.
Besides direct resistance, people are finding ways to live outside the conventional financial system and, in the process, prefigure what might replace it. Complementary currencies, time banks, direct-to-consumer farm cooperatives, legal aid cooperatives, gift economy networks, tool libraries, medical cooperatives, child care cooperatives, and other forms of economic cooperation are proliferating in Greece and Spain, in many cases recalling traditional forms of communalism that still exist in societies that aren’t fully modernized.
Debt is a potent rallying issue because of its ubiquity and its psychological gravity. Unlike climate change, which is easy to relegate to theoretical importance when, after all, the supermarkets are still full of food and the air conditioner is still running, debt affects the lives of growing numbers of people directly and undeniably: a yoke, a burden, a constant constraint on their freedom. Three-quarters of Americans carry some form of debt. Student debt stands at more than $1.3 trillion in the United States and averages more than $33,000 per graduating student. Municipalities around the country are cutting services to the bone, laying off employees, and slashing pensions. Why? To make payments on their debts. The same is true of entire nations, as creditors—and the financial markets that drive them—tighten their death grip on southern Europe, Latin America, Africa, and the rest of the world. Most people need little persuading that debt has become a tyrant over their lives.
What is harder for them to see, though, is that they could ever be free of their debts, which are often described as “inescapable” or “crushing.” That is why even the most modest challenges to debt legitimacy, such as the aforementioned citizen audits, have revolutionary implications. They cast into question the certainty of debt. If one debt can be nullified, maybe all of them can—not only for nations but for municipalities, school districts, hospitals, and people too. That’s why the European authorities made such a humiliating example of Greece—they needed to maintain the principle of inviolability of debt. That’s also why hundreds of billions of dollars were used to bail out the creditors who made bad loans in the run-up to the 2008 financial crisis, but not a penny was spent bailing out the debtors.
Not only does debt have the potential to be a rallying point of near-universal appeal, it also happens to be a unique political pressure point. That’s because the results of mass debt resistance would be catastrophic for the financial system. The Lehman Brothers collapse in 2008 demonstrated that the system is so highly leveraged and so tightly interconnected that even a small disruption can cascade into a massive systemic crisis. Moreover, “won’t pay” is a form of protest easily accessible to the atomized digital citizen who has been sundered from most forms of political association; arguably, it is the only form of digital action that has much real-world impact. No street protests are necessary, no confrontations with riot police, to stop payment on a credit card or student loan. The financial system is vulnerable to a few million mouse clicks. Herein lies a resolution to the dilemma posed by Silvia Federici in the South Atlantic Quarterly: “Instead of work, exploitation, and above all ‘bosses,’ so prominent in the world of smoke stacks, we now have debtors confronting not an employer but a bank and confronting it alone, not as part of a collective body and collective relation, as was the case with wage workers.” So let’s organize and spread awareness. We needn’t confront the banks, the bond markets, or the financial system alone.
What should be the ultimate goal of the debt resistance movement? The systemic nature of the debt problem implies that none of the policy proposals that are realistic or reachable in the present political environment are worth pursuing. Reducing rates on student loans, offering mortgage relief, reining in payday lending, or reducing debt in the Global South might be politically feasible, but by mitigating the worst abuses of the system, they make that system slightly more tolerable and imply that the problem is not the system—we just need to fix these abuses.
The aforementioned policy proposals have a further defect as well: They are so moderate they have little potential to inspire a mass popular movement. Reduced interest rates or other incremental reforms are not going to arouse an apathetic and disillusioned citizenry. Recall the Nuclear Freeze movement of the 1980s: Widely decried as naïve and unrealistic by establishment liberals, it generated a vocal and committed movement that contributed to the climate of opinion behind the START agreements of the Reagan era. The economic reform movements need something equally simple, graspable, and appealing. What about the cancellation of all student debt? What about a jubilee, a fresh start for mortgage debtors, student debtors, and debtor nations?
The problem is that canceling the debts means erasing the assets upon which our entire financial system depends. These assets are at the basis of your pension fund, the solvency of your bank, and grandma’s savings account. Indeed, a savings account is nothing other than a debt owed you by your bank. To prevent chaos, some entity has to buy the debts for cash, and then cancel those debts (in full or in part, or perhaps just reduce the interest rate to zero). Fortunately, there are deeper and more elegant alternatives to conventional redistributive strategies. I’ll mention two of the most promising: “positive money” and negative-interest currency.
Both of these entail a fundamental change in the way money is created. Positive money refers to money created directly without debt by the government, which can be given directly to debtors for debt repayment or used to purchase debts from creditors and then cancel them. Negative-interest currency (which I describe in depth in Sacred Economics) entails a liquidity fee on bank reserves, essentially taxing wealth at its source. It enables zero-interest lending, reduces wealth concentration, and allows a financial system to function in the absence of growth.
Radical proposals such as these bear in common a recognition that money, like property and debt, is a sociopolitical construct. It is a social agreement mediated by symbols: numbers on slips of paper, bits in computers. It is not an immutable feature of reality to which we can but adapt. The agreements that we call money and debt can be changed. To do so, however, will require a movement that contests the immutability of the current system and explores alternatives to it.
Make no mistake the war has started, in fact it never stopped and it is a war on humanity.
There are only two types of people in this world. Those that want to tell everyone else what to do, and those that want to be left alone. The vast majority of us fit the latter description which is convenient for those few that fit the former category.
The world wars and all the wars before were not about this side or that side they have been at least for most of the last few centuries purely about culling the population of this planet. Particularly the young physically fit and people capable of rising up and overthrowing the system they see as ordered.
These people are mentally ill and do not respond to stimulation in the way the vast population do, this is evident by the emotions they exhibit over events that would be extremely troubling to any normal individual of the species.
This mentally ill category of human being is abundant in government, finance and upper levels of the military where a lack of empathy and remorse are of great importance.
These mentally ill individuals do however need enablers from the majority of the population who have otherwise been identified as “useful idiots”.
Unfortunately these people are generally good people who are woefully misinformed and have disorders of there own though not as serious or destructive as the ruling Psychopaths. These people are compartmentalised and fed propaganda to keep them from working out that they too fit the category of loser in the bigger scheme of things.
Eventually things get so bad that the obviousness of it can be no longer hidden and a major distraction or enemy is formed in peoples minds so the patriotic and brave individuals caught up in the hysteria are conveniently marched off to be killed on both sides.
The architects of the war are never in any real danger as they control both parties involved as they happily cull each others population and pat each other on the back while drinking champagne in Switzerland.
Lately however the tide has turned somewhat and as with any scam that goes on too long the players begin to get sloppy and enablers become harder to find as people begin to become more informed through the internet.
The puppet masters at the top appear to have been sideswiped initially by the internet and have been playing a game of catch up ever since, trying to put the toothpaste back in the tube so to speak. A combination of things have made the old style war of march them into each other and let the slaughter begin just don’t work anymore for a number of reasons the primary one being that people are just too selfish too stand in front of a machinegun for god and country and quite frankly I don’t blame them.
Enablers are getting thin on the ground and the psychopathic elite don’t even have the good sense to pay them handsomely, the police are as poorly paid as anyone else and so is the military, they don’t even look after the families of the injured and killed in many instances it is truly sickening.
Chris Spivey has exposed the psychopathic elite for what they are and they intend to crush him before he can expose them further but it is too late. The hysterical response to the most ridiculous, half arsed, pathetic, dogs breakfast of a false flag at woolwich is an indication of not only how sloppy these people are getting but also how difficult it must be getting to recruit enablers prepared to prepare the act, these people are totally useless, either that or this is some kind of testing the water of how stupid or mind bent disengaged the population has become.
Jailing Chris Spivey tomorrow for exposing Woolwich and the Lee Rigby false flag won’t change anything except perhaps reinforcing peoples perception that the world really has gone mad.
Here is the story written by someone else:
The Prosecution of Chris Spivey.
Chris Spivey is learning the hard way that the evil ones hate their lies being exposed.
August 19th, 2015.
The Prosecution of Chris Spivey.
Who is Chris Spivey?
Chris Spivey is a British online journalist responsible for most of the writing on the popular Chris Spivey the World Put Right website. An irreverent and coarse blast of truth in the face of the wicked British Establishment that has gathered a dedicated following since inception in 2012 and broken many important stories.
What has happened?
Chris Spivey was recently convicted in a British court of the crime of Harassment in relation to his investigation into the alleged killing of British soldier Lee Rigby in Woolwich, London in May 2013.
I have read all the mainstream media coverage on this case that I could find, and the Crown Prosecution Service media release yet in all honesty the specific nature of Spivey’s crime is completely unclear.
It is clear that part of the case against Chris Spivey relates to material posted on his website and the views he expressed about the Woolwich incident.
The CPS (Crown Prosecution Service) states that:
“The prosecution’s case was that the combination of the postings, containing a mixture of grossly offensive remarks about the Rigby family, upsetting assertions surrounding the murder, and the publication of details of two of the family’s homes, could not be justified under freedom of speech”
A Breach of Chris Spivey’s Human Rights?
Regardless of what happened in Woolwich there is no doubt that any prosecution that uses the fact that Spivey expressed contrary opinions as part of the evidence is appears to represent a breach Chris Spivey’s human rights as outlined in the UN Declaration of Human Rights and the EU Human Rights Charter as these unambiguously proclaim the right to freely express political views.
The EU Charter states in Article 10 that “Everyone has the right to freedom of thought, conscience and religion.”
Article 11 is more explicit
“Article 11 Freedom of expression and information
1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers.
2. The freedom and pluralism of the media shall be respected.”
If Britain’s corrupt leadership do not support the central tenets of the EU Charter they should explain why this is the case and begin immediate steps to withdraw from the EU and the United Nations. The British legal system appears to be operating in a manner that is inconsistent with the fundamental tenets of human rights as stated in both the EU Charter and the UN Declaration.
A Flawed Process?
It is also worth noting that the alleged victims did not appear before the court, all the evidence tendered was provided by the police who were the only witnesses.
Spivey was thus convicted without his counsel having the opportunity to question the witnesses against him in another clear breach of all legal norms and traditions, and a denial of natural justice.
If the alleged victim was so upset by Spivey’s claims why did the alleged victim take no action to curtail Spivey’s actions or simply ignore Spivey’s posts which had no material impact on her whatsoever and no realistic prospect of doing so?
The fact that Spivey is right, undoubtedly correct in the broad claim that Woolwich was a stage-managed and fabricated bit of psychological warfare against the people of Britain does not even matter. Even if Spivey was completely wrong, the prosecution would still be malicious, politically motivated and illegitimatein my opinion.
The absurdity here is completely obvious. Do you think the woman with the shopping may have gone the other way home perhaps? Also look at the “killers” right hand.
There is in fact no possibility whatsoever that the Woolwich incident was an authentic terrorist attack or anything of the sort. Analysis of the Woolwich event, even crude preliminary analysis makes it absolutely clear that there is no way known that this is anything more than a Benny Hill standard piece of street theater constructed and executed extremely poorly in full public view.
Woolwich was a made for TV faux event, with multiple cameras filming multiple takes, terrible special effects and a C grade cast of players.
The way to prove Woolwich manufactured is very simple. Watch it.
Woolwich killers being shot charging police,extended footage
Note that there is no blood present and that all the blood we see on the “killer” at all times has been digitally inserted. Something that is hard to miss because it also all disappears at certain stages of the event.
There is no good part of the story, none.
This is from the mainstream coverage of the case. The digital job was clearly very rushed and terribly shoddy. The lack of paint on the clothing was a major blunder. It is absurd.
The bad actor delivering the silly speech with the digitally inserted blood on his hands.
The terrorist killer who throws down his knife as he runs at the police and leaps through the air theatrically and positions himself halfway across the road where he moves his legs to cover the spot cues the handlers have left at the spot.
Oh dear! The chaps and chapettes of special effects had a short nap. These are the real hands of the man.
Commonsense and empathy.
Imagine yourself on a street where a man has just been butchered by jihadist nutters who are standing in the street armed with knives and firearms. You are out shopping in your local area, you eave the supermarket and you are waking home and you notice a dead body lying in the street and two large men prancing about with weapons.
Do you walk down that street, past the dead body in the middle of the road, past the knife wielding “blood spattered” large men ranting in the street or do you think you might walk home down a different street?
That’s right, you walk home down a different street as you do not want to walk past a “blood spattered” maniac who just hacked someone to death.
Except in Woolwich, where numerous shoppers walk blithely past the “blood spattered” knife wielding man and the body in the road.
It is hokum. Pure hokum.
Another “bystander” wanders past during the Woolwich farce.
The British Establishment Press.
There were a number of pieces in the corporate media regarding this case. Not one of them contained a single word of truth. It was both predictable and shocking. There was not a word about the possible implications for free speech in the conviction. Not a word.
All I would say to the members of the British Press is that your souls are in great danger and I hope it was worth it.
But I suspect that you may come to regret the way you have sold your soul to the forces of darkness and evil.
The choices you have made will resonate forever and one day you will reap what you have sown. I hope you understand what you have done.
Links to the genuinely nauseating, mainstream articles on this case are at the very bottom of the page.
The legitimacy of a Government that has acted utterly cynically and made a further mockery of the rule of law in staging this event to frighten the people and cause them to hate and fear Muslims surely has to be questioned
Where does the public interest sit in staging these events?
What on earth gives the Government, or part of the Government the idea that they have the right to manipulate and deceive the people they are supposed to be serving.people and terrify them with lies?
This evil little stunt has genocidal implications when viewed in the light of Britain’s behavior over the preceding decade. This was an evil thing to do and it is truly so sad that we have been reduced to this pitiful state at any point in time let alone the present.For decades British Intelligence have been in the game of manufacturing terrorism in order to terrify and control the population. Whenever a villain has been required, they have obliged.
The publication of addresses, while in no way or manner in my opinion constituting harassment, may be unwise in future. This appears to have been the element that enabled this dirty game of political prosecution to be played. It was the one fact that has been used to weave a grotesque lie around.
If this is the ploy that is being used to implement Cameron’s oft stated ambition of tyranny it might be counterproductive to publish personal details of alleged crisis actors and other perceived accomplices to the hoaxes and/or false flag events in future in order to prevent the corrupt Establishment from using this technique as a means to persecute and criminalise truth-tellers.
The Precedent is Clear.
If Spivey is imprisoned, as is at least possible (unthinkable but apparently possible) his case will become a very big cause very quickly and one consequence of that will be a major increase in public interest in alternate theories and a massive upsurge of interest in the Woolwich incident.
Do not think for a second that any of the things that have been done to Spivey cannot be done to you.
If Chris Spivey can be prosecuted for voicing a controversial opinion on the internet, anyone can be prosecuted for expressing any view on the internet or anywhere else.
Truth will clearly be no defense.
Therefore every possible political and legal effort must be made to overturn these convictions and to establish a precedent that ensures that such vindictive political prosecutions are never allowed to happen again.
I would encourage anyone with the ability to be in Essex on the morning of August 27th to attend the Essex District court and offer support to Chris Spivey. If not, make a phone call, write a letter. Be polite and firm. Do not let these people destroy your hard won liberty. DO SOMETHING! Enough is enough.
This is a test. This is a moment that cannot be allowed limply to pass. People need to make their feelings known (in a civilised and dignified way) and more importantly, a whole series of legal actions need to be undertaken against the British Government in every possible jurisdiction, from Europe, to the UN, to the local British courts until justice and human rights have been restored.
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