"Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens....Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." ~ John Maynard Keynes
Forgive, Forget, Pass the Buck
It's Christmas time again and it's a certainty that many have once more added to their already bloated credit card balances. I heard last week on the news that it takes the average American consumer up to six months to pay off their Christmas spending binge. Perhaps in the seasonal spirit of giving, banks will give their customers what the United States just gave Iraq : complete forgiveness of debt owed. Not likely. Unlike the United States government, at some point, banks have to answer to their customers for their actions.
Representatives of the Bush administration recently announced that Iraq would no longer be obligated to pay back the outstanding balance of $4.1 billion left over from the regime of Sadaam Hussein. The United States is not alone in removing this financial 'burden' from the shoulders of the 'new' Iraq ; many other creditor nations in Europe have agreed to forgive all, or at least a substantial portion, of their share of the debt carried over from the 'old' Iraq . As the official line from Washington goes, debt forgiveness for Iraq will make it easier to secure Iraqi democracy and set that country on the path to reconstruction.
Let's think about this. Does anyone really believe that all that accumulated debt is just going to disappear into thin air, never to be a burden to anyone again? Not on your life. If you can spare the time, take a few years out of your life and search through the absolutely insane code of United States government budgeting practices and you will probably find an entry for $4.1 billion buried in the defense budget. Even better, the CIA's budget. Much of the CIA's budget is classified, anyway. What better location to make an additional burden to the American taxpayer disappear? Should any concerned or zealous citizen ever get too close to the source of that accounting trick, the president can count on his minions to cite that all-encompassing response to queries about secretive and deceptive government action: national security. In other words, end of discussion; now shut your face and get lost, you traitor and terrorist sympathizer!
No doubt it was real easy for President Bush to sign off on this debt forgiveness. There is probably quite a bit of uncomfortable and potentially damaging paperwork attached to all that old debt somewhere in the mix. Seeing how our government is so incompetent at keeping track of things, writing off that debt whole-hog is probably the smartest thing to do.
Hussein likely used a good portion of that money to fund all those evil weapons programs he had at one time, or maybe to build all those tortures chambers where he had his domestic enemies mutilated and murdered. What about his secret police? You know, the ones who made all those people disappear, and who then, according to our government, ended up in mass graves. I'll bet the money we gave Hussein paid the salaries of the cops and the cost of the bulldozers. In any event, let us not forget that all of this was once done with the complete approval of our government. Once Hussein spent his capital as a useful tool of the CIA, it was time for the United States government to begin sending all past incriminating evidence down the Memory Hole. Consider this debt forgiveness just one more part of that process.
In addition to covering up the past, forgiving Iraq 's debt is also easy for President Bush because it's not his money. What would happen to a banking corporation if its CEO arbitrarily decreed that billions of dollars in corporate debt owed to his bank would just be forgiven because he and his advisors decided that course of action would be best to assist those indebted companies get back on their feet and remain competitive? The government would investigate, the media would characteristically blame capitalism and greed, the investors would howl, and the bank's stock would tank. The CEO would be dragged before a congressional committee, the testimony of which would be used to incriminate him at his coming trial. But when the president announces that the government is going to do the same thing, all is well because 'national security' trumps truth and legalities.
When a bank or any other business interest holds debt that cannot be paid or will not be paid, the debtor may get out of paying the bill, but somebody, somewhere gets stuck holding the tab. The prices of goods goes up, service fees increase, and borrowing becomes more expensive and more restrictive. That's the price we all pay when some fail to meet their financial obligations. The buck gets passed to someone else. Thanks to President Bush, Americans and their posterity just got stuck with the cost of cleaning up someone else's mess. Again.