Why the Portuguese public debt is not payable
by Vitor Lima
There has been “not one historical incidence” where austerity policies have led a country to get out from under a heavy debt burden.
Ashoka Mody, former IMF chief for mission to Ireland
Summary
Conclusions
1 - The debt is an instrument of domination.
2 - A partnership between States and Capitalists
3 - Portugal - Scenarios for a continued debt payment
3.1 - Proactive and radical continuation (Hypothesis I)
3.2 - A proactive amortized continuation (Hypothesis II)
3.3 - A prolonged continuation (Hypothesis III) 4 - An evaluation of the debt installment not to be paid 5 - How to get out of this?
Conclusions
·The debt is a mode of domination that educated the debtor into submission through guilt;
· The predominance of financial capitalism today requires an infernal cycle of artificial generation of money and credit, with subsequent continued and permanent capture of debtors;
· Austerity, impoverishment, loss of rights and the precariousness of life are the dramatic effects of financial mechanisms and they are simultaneously presented
- by bankers and politicians - as the paths to a redemption always deferred.
· The mechanisms of debt and austerity have as their principal actors the high power of the financial system and the political classes that elbow their way in, and constitute the domestic sycophants of the former;
· The state apparatus, in addition to its known role as collective capitalist, is a department of the financial system whose directors are designated by ministers.
A formal incorporation does not exist, because it is convenient to keep the illusion of separation in the context of huge capital, thereby ensuring the acceptance by the public of the legitimacy of the tax punch and the authorities;
· The financial system and its Member States are engaged in the excessive
reproduction of money capital, drowning the "real economy" in debt, encouraging consumerism and debt in people in a demented formula that makes the planet insufficient for their ambitions;
· The limitations of this model create difficulties in the weakest strains of the financial system itself, as in the case of Portuguese banks, whose existence has been kept because the ECB has been financing them to engulf speculation and the purchase of Portuguese debt, refusing to accept losses originated in nearly two decades of Portuguese economic distortion;
· Capitalism, in its current configuration, transfers its own problems to the Member States that, obediently assume debts, reduce more and more their social functions, bringing more and more into question the utility of the State, when its own activity is reduced to helping capitalists and creating difficulties for the multitude;
· Nothing virtuous is expected in terms of structural change stemming from community and national institutions; continuity is guaranteed and only a mobilization of multitudes can create a new economic system and a system of democratic expression, without capitalists or political classes.
· Any solution that includes continuation of payment of the service of the debt means a very heavy financial burden on the lives of all who live in Portugal, primarily workers and the poor.
Portion of burden of the debt on the gross product 2014/21
Hypothesis I - 8.8 a 12.4%
Hypothesis II - 6.6 a 8.5%
Hypothesis III - 5.8 a 6.6%
· In addition to not being economically possible to pay in normal instalments a debt that will soon be computed in € 242,000 million,1 there are several issues of legitimacy. One of them is that very little of that amount relates to the satisfaction of the needs of the Portuguese; then, the goals of the constitution of the debt - to absorb the effects of the credit policy that has been in force since the 1990s, as well as the difficulties of the euro - should not be borne by the population; and finally, because the gangs in the government acted on measures with such frightfully disastrous impact and far surpassing the prerogatives that can be attributed to a so-called representative democracy;
· In turn,the financial, global or private, institutions did not ignore the illegitimacy resulting from the divorce between the beneficiaries and the real credit payers; nor were they unaware of the rapid growth of the debt, paralleling the withering away of the Portuguese economy, the dismantling of the social or the degenerate character of political institutions in Portugal.
· A volume of debt abatement leading to about 60% of GDP, the maximum allowed by the Treaty on Stability, Coordination and Governance will be amount of around € 143,000 M, and even then, economic growth will remain hostage by debt payments, leaving the people’s standard of living stagnant for many years:
Portion of burden of the debt on the gross product 2015/21
Variant A - 2.7 to 3.1 %
Variant B - 2.4 to 2.6%
Variant C - 1.8 to 2%
Any permanent solution to the issue of debt, allowing the generation of wellbeing in Portugal will require:
o an immediate new framework of democratic political organization;
o social mobilisation for the confrontation with financial capital and its institutions;
o framing within a context of dispute at the level of the EU southern and eastern peripheries, with emphasis on Spain;
o the radical alteration of existing inequalities, which, to be consolidated,requires a new political organization and a new model of representation, without a political class;
o and the construction of a society without capitalism, without private ownership of the product of labour, self-guided and guided toward the satisfaction of the needs of the population.
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"Why the Portuguese public debt is not payable"
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