The governments of every major nation are going to default on their debts. There are two relevant questions: (1) How? (2) When?

This was originally posted in MARCH 2008!!..

What Is Money?

Part 11: The Great Default

by Gary North

The governments of every major nation are going to default on their debts. There are two relevant questions: (1) How? (2) When?

Establishments around the world all deny this. They have gained power and wealth by means of the expansion of government. They have justified their success by insisting that the government-business alliance is the only way to establish economic growth and economic security for the masses. This claim rests on a more fundamental claim, namely, that an unhampered free market is destructive of economic stability and will inevitably lead to economic depression.

The Establishments are universally Keynesian. John Maynard Keynes‘ book, The General Theory of Employment, Interest, and Money, was published in 1936. It defended in theory what all Western governments had been doing in practice for at least five years, namely, running huge deficits. Keynes became as close to an academic high priest as any modern scholar ever has. He was the apostle of national government debt. His ideas today are more influential than they were at his death in 1946. We live in the age of Keynes.

I can think of only one major Establishment figure who has broken with the Establishment on the question of the great default: Peter G. Peterson, who was the chairman of the Council on Foreign Relations until 2007. He now runs the Peter G. Peterson Foundation, which focuses on the looming bankruptcy of the U.S. government. More than any other person of influence, he has warned of the bankruptcy of the Medicare/Social Security programs and their equivalents in the West…CONTINUED

http://www.lewrockwell.com/north/north778.html

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