Global Debt Crisis

August 2022 Forums General discussion Global Debt Crisis

  • This topic is empty.
Viewing 1 post (of 1 total)
  • Author
  • #231091

    The world of ever-low interest rates has now come to an end. A rise in interest rates means a huge shift of purchasing power from indebted households, firms and governments to their creditors. The Economist calculates that a 2% increase in US interest rates in 2021 would, by 2026, double the share of global GDP absorbed by interest payments.

    Global debt – of households, private firms and governments – reached $305tn (£254tn) in 2021, up from $83tn in 2000. Furthermore, global debt now equals 355% of global GDP, up from 120% in 1980 and 230% in 2000. In 2021, debtors of all types handed $10.2trn – 12% of global GDP – in interest payments to their creditors. In comparison, the annual income of the poorest 50% of humanity is just 8.5% of GDP.

    Capitalism is also a production process, and the energy that fires it is living labour, performed by workers and farmers who produce more wealth than they consume. The surplus is converted into capital – that is, self-expanding wealth, wealth that must either make profits or shrivel and die. Capital, whether in the form of stocks and shares, bonds, real estate or fine wines, is, in the words of Karl Marx, “dead labour which, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks”.

Viewing 1 post (of 1 total)
  • You must be logged in to reply to this topic.