This is the teaching of history, outstanding debts are never paid. They are either rejected or destroyed, as it was with Russia. There will come a time after the hard phase of crisis, where everyone will realize that the risk kills growth, hope and mobility in our society. And of course freedom.
Pseudo-democratic societies bought social peace by what can be called "risk premium package", increasing wages, social transfers, securities, employment creation, which made legitimate social order existing.
The accumulation of debt, the rising of inequality and unemployment, make this solution now obsolete.
We can not continue this way as debt is too big.
|Image courtesy of [Stuart Miles] / FreeDigitalPhotos.net|
There will come a time when the United States will propose solutions. These solutions require drastic reduction in the debt burden,and it will be like a gift to the global world but in its own interest also.
A fairer monetary system
The present monetary situation is temporary the world can not live forever flooded with liquidity.
One day or another, it will leave the monetary and fiscal policies because they are not fit anymore.
Then the question will arise for a monetary system more satisfying, more balanced, that better reflects the situation of the whole world.
A system which will reflect justice and not and not the one we have right now, which emerged from the Second World War. A system that will take advantage of advances in science and technology and put it at the service of men.