The truly “funny” thing about the gracious nature of debt forgiveness…is that even those who lost the most (the Banks) afterward prospered right along with (and even more than) the rest of society. From this we need to learn the following things:

1) Forgiveness of excessive and onerous debt, no matter from who or what its cause, is wise and economically sound
2) Debt is the “product” of the Banking/Financial system and the way they make money.
3) Banking and Debt has always been a problematic business model for at least the last 5000 years.
4) Private Banking has no structural balancing counterpart making it a monopoly in this sense
5) Debt as an idea, as a monopolistic paradigm/zeitgeist is even more importantly a domineering lifestyle forced upon us by our failure to understand and demand its balancing with an idea of equal and freeing strength, namely Gifting, that must be integrated into economic theory and policy…if we are ever to evolve the discipline and peaceably maintain civilization.

Dave Taylor:  At Chdwr, I forgot to add that the workman (even a banker) is worthy of his keep.

The problem of paying the banker is resolved if we ALL have to live within a credit limit appropriate to the available resources and value of the work (including self-development) we have previously done, and if we are able to pay off our debts by doing our jobs and looking after ourselves insofar as we are able. Perverse motivation by fear of losing our jobs can be replaced by prizes for excellence in just about anything other than monetary profiteering, i.e. acquiring unnecessary credit.

Me:  Dave,

On a personal responsibility level I don’t disagree with anything you say, but if on a systemic level the economic system is in a continual state of disequilibrium because the rate of flow of total costs exceeds the simultaneously created rate of flow of total individual incomes with which to liquidate those costs…then anecdotal frugality and austerity won’t matter because systemic debt will inevitably build up as a necessity of keeping the system’s nose above water level. The data for this ongoing and hence dynamic state of the economy is to be found in the cost accounting statistics of any and all successful businesses, and then doing the calculus regarding the flows of that data the deepest cause of economic instability is revealed. Costs exceed individual incomes simultaneously produced.