Owniots and Government in the Financial Credit Crisis: Who Owns and Who Owes Governments?

I was reading Stephen Castle at the New York Times Global Business in Europe Girds for Breakout of More Troubled Financial Firms and the major question in my mind was -- if there is all this government debt out there, then there must be people to whom that debt is owed.

But no one talks about THEM. Now why is that?

Day in and day out the mainstream media is keeping everyone on the edge of their seats with new and ever more scintillating stories about all the governments that are on the verge of bankruptcy because of their huge debt  -- to WHOM?.

So why are all these governments IN DEBT rather than IN THE BLACK?
And why has all this debt been authorized? and why is it a problem?
Who owns the government? and who owes to the government?

If governments had efficient and sufficient systems of taxation, covering all of their expenditures, then there would be no deficits.

That is easy to follow, no?

As a practical matter, however, politicians do not get elected by running on a platform of sufficient taxation, but rather, to get elected, politicians promise their voting constituents lower taxes. It is the oldest political scam and it always works. This says something negative about the intelligence of the voting public but we do not want to spell it out too clearly here.

The result is that available government funds do not cover the costs of government programs that need to be paid for, whether this be military defense, police protection, education, public roads and road construction, public utilities, parks and government real estate, social security, medical care, or whatever.

The same people who are unwilling to pay their fair share of TAXES, on the other hand, are quite willing to loan the government money (via government bonds, U.S. Treasury Certificates and that kind of thing) to pay for the necessary services that THEY themselves use.

In fact, the more money you have, the more the government works for you, because much of what we call government services serve the needs of the HAVES.

The military and police protect what people HAVE. They protect "the system" and those profiting from the system.

Similarly, public schools educate the work force, which goes out and makes profits for the same private corporations who are unwilling to pay their fair share of taxes to finance that education.

For their profit-making professions and businesses, everyone uses the roads and the public infrastructure as if it were a given -- but forget it has to be paid for -- by someone.

Employers also want healthy workers and not people plagued by communicable diseases, etc., so that you have to some measure of national health control, and so forth.

Since the existence of government-financed NEEDS can not be denied, the moneyed elements of society, RATHER than paying their proportional share of sufficient taxes to pay for existing government services, lend that same money to the government, in return for payment of interest.

For moneyed interests, this is the optimal solution. Not only do they not pay taxes, they also accumulate even more money via interest payments.

But WHERE is that interest money to come from, economically seen?

By definition, government taxation is ALREADY too low at the time that money is lent to the government, otherwise they would not have to borrow it. So the debts continue to pile up.

Over the course of years this lending of money to governments reaches its final, inevitable result: the amounts of money owed by governments are simply so much greater than their tax revenues that the books no longer balance.

Those who have money also generally have the political power and thus see to it that legislatures and leaders are elected who reduce THEIR taxation even further.

The burden of paying government bills thus is shifted to the weaker elements of society, who as a consequence have LESS and LESS money until the straw breaks the camels back and they are able to pay nothing. Social unrest results.

There is probably no real solution for this because of the inherent greed of humanity. No matter what people have, they want more, so one can not rely on either their wisdom or prudence to save the day.

Nor has academia been very helpful in imparting new knowledge into the picture. For years, Nobel Prizes have been awarded in economics for a profession that apparently has no real clue. If they did, the world economy would not be in its present allegedly precarious state. Maybe an anti-Economics Nobel Prize should be awarded for "common sense" and the following rule: you profit from society to the degree of your wealth. The more wealth you have, the more you have profited, and the more you should pay into the tax revenue pots. Period. No deductions. Straight proportional taxation on wealth. That will keep the government coffers full.

The logic behind that statement is that by definition, all government-financed programs of society have benefited those the most, who have profited the most, since all of these programs, taken together, make up the system which has allowed some to profit more than others. THEIR burden for government finance should be PROPORTIONATELY comparable to their spoils viz. winnings. That is quite fair.

There is in fact plenty of money out there to pay off government debts, everywhere -- but that is not happening because the people who have the money are unwilling to pay off those debts.

They want THE OTHER GUY to pay.

It is a fantastic financial racket for the upper echelons of society everywhere, but it is a type of Ponzi Scheme with a predictable outcome.

At some point, there is simply no one there to pay the debts except they themselves, the people who HAVE the money.

As a matter of economics, therefore, this means only one thing and that is that the debts are paid off with "funny money", i.e. the money of inflation, or via currency devaluation, either directly or indirectly, openly or surreptitiously.

We do not worry about government debt. We worry about the consequences of this rampant greed of the HAVES, which historically always leads to social unrest, political upheavals and/or revolutions - understandably.