Increased Government Debt

Government debt is mostly held by the private institutions of the financial oligarchy. In lending money to governments, the dominant oligarchs of the ruling elite benefit in several ways.

The rich can park their money in a safe haven for a short or long term and even receive interest for doing so. This is particularly important for the rich during crises such as the current COVID-19 pandemic when other investments are risky or they have pulled money out of the stock market and have excess cash on hand.

The government in turn provides bailouts and buys company paper securities that are not saleable at a particular time to private buyers because of the risk involved. The oligarchs have it numerous ways! This is the public-private partnership in action to serve the rich.

The government receives money from this private borrowing that it then uses in pay-the-rich schemes as handouts to the financial oligarchy and its businesses. Examples are the handouts to large corporations during the pandemic or the federal government's $4.5 billion buyout of the Trans Mountain pipeline and the Alberta government's $7 billion injection of funds into the Keystone XL pipeline project. Neither of those projects could raise private investment funds. Government money is routinely used to finance large infrastructure projects in which the biggest private construction and management companies participate and gain guaranteed profits.

The existence of government debts is used for propaganda purposes to reduce spending in social programs that directly benefit the people. Governments and their mouthpieces in the media screamed that they needed $60 billion yearly to service the public debt held by the financial oligarchy, which constrains and even contracts spending in social programs. It is a self-serving farce for which the people are made to pay because the decision-making power is not in their hands.

The necessity to borrow from private interests is presented as the only alternative for governments to raise money as the financial oligarchy considers taxation of the value its workers produce within its private business interests as detrimental to the economy. A compliant media it controls do widespread propaganda for this regressive view.

This article was published in

Volume 50 Number 34 - September 12, 2020

Article Link:
Increased Government Debt


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