William Greider over at Alternet is discussing the possibility of debt forgiveness as a solution to the crisis of capital.
I think it’s their only way to avert the Consumers from creating their own local economies, after much hardship.
Debt forgiveness could also bring down the financial system. It is something that would finally affect the bankers, or the bankers would have to go on a property confiscation spree as a condition of “forgiveness.”
That’s what’s amazing about this. The bankers may finally have to accept a haircut in order to save the System, and even debt forgiveness is not a sure thing. So it’s a game of chicken between the bankers and the rest of us.
A game of chicken on a sinking ship, that will sink everyone, including the bankers.
Another possibility is that debt forgiveness could lead to a new spurt of economic growth. If this happens, some people will say, “excellent, business as usual again!” A lot of money will be made for a while, adn there will be a new batch of fools who think it’s “forever.”
I knew a real estate broker making a killing back in 2004-2007, and he said that “the housing boom will last for at least the rest of my lifetime.” He was in his 50’s, so he was banking on another 20 years at least.
The thing is, the people who realize the boom isn’t forever can get in on the Ponzi early and get out early, and then short the fools. They have been playing this game with us long enough that we can begin to count the cards, so to speak.
It’ll probably be another real estate boom, driven by debt forgiveness and building housing for immigrants. Make a quick killing, invest your profits in “new urbanist living” that is, multifamily real estate in SWPL urban areas (aka latte towns, like Putney VT and Northampton, MA). A multifamily SWPL house can be teh beginning of a localist economic commune.