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We owe it to ourselves to reject idea of debt jubilee

Colm McCarthy


Our continued access to the bond market will depend on how credible our commitments are on future taxation and spending

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JUST THE TICKET: Economist and columnist David McWilliams backs repricing the entire debt structure

JUST THE TICKET: Economist and columnist David McWilliams backs repricing the entire debt structure

JUST THE TICKET: Economist and columnist David McWilliams backs repricing the entire debt structure

According to the Old Testament, God advised Moses that rulers should arrange, once every 50 years, a debt jubilee, to include the freeing of prisoners and release for the enslaved, as well as the forgiveness of amounts owing to moneylenders. Since the Covid crisis has piled extra debt on over- borrowed governments and businesses, a debt jubilee sounds just the ticket. The Irish Times columnist David McWilliams likes the idea: "This means repricing the entire debt structure of the economy, which is something the ECB has given central banks permission to do."

Cutting the level of debt has the troublesome feature that debt owners think they own an asset and object if policy makes it shrink. The biggest owners are banks - moneylenders, as unpopular now as in biblical times. Their assets are loans, but their liabilities consist largely of the public's money, so they cannot absorb a hit to asset values without defaulting on the public.


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