I just looked up the word '
deadbeat' using Google, Sydney, because it is a word which I would not tend to use.
The Free Dictionary - deadbeatUrban Dictionary - deadbeatSo what do deadbeats do for money? Well, they could barter, I suppose, Sydney, although if they are lazy, they may not have much to barter with. In the context, however, I suspect that the BBC is reporting that President Obama means that the United States of America will potentially become a country which does not pay its debts (after Tuesday 1 October 2013). Could America default?
BBC News - US House passes budget bill that would defund healthcare lawThere is a long-standing problem with debt, and not only in the United States of America and United Kingdom. Much of the West is accumulating debt at an unsustainable rate, which means, for example, that many governments cannot even control their deficits, spending more than they can manage to raise through taxation. There is therefore something of a crisis of confidence, particularly amongst creditors, who are unsure whether their investments are safe.
Central banks around the world have therefore been pumping trillions of US dollars into banking systems in an effort to keep money flowing as a result of the global financial crisis of 2008. Pertinently, '
The Financial Times' leads this weekend with some editorial comment on
heading to the exit: no good options as Fed weighs end to quantitative easing.
When the music stopped in financial markets in 2008, the Federal Reserve struck up a replacement tune. By buying assets with newly minted cash, it has driven down yields on government bonds and forced investors to take risks in search of higher returns. This was intended to breathe life into the economy until a recovery could continue on its own. A diminuendo had been pencilled in for this month. Yet the Fed has instead decided to keep monthly purchases at $85bn. Finding a way out is proving harder than thought.
Although quantitative easing has lifted spirits, its effect has been more muted than some had hoped. Despite low funding costs, investment is in the doldrums. Governments are cutting deficits, households are repaying debt, and corporations are piling up cash. Consequently, the money created by the Fed is not funding activity such as housebuilding or capital investment, which would contribute directly to growth. Instead, it is lifting the value of existing assets. This indirectly boosts output by making owners richer and more willing to spend. But it may not be enough to trigger a self-sustaining economic revival. The salmon pink newspaper concludes thus:
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From a European perspective, Sydney, kleines c reckons that the euro should be made a common rather than a single currency across the European Union as soon as possible. If kleines c were in charge of the wider world economy, I would abandon Plan A and B this weekend, in favour of plan c. I would negotiate a change to the law, not only in the United Kingdom and the European Union, but all around the world, and then coordinate the purchase of all sovereign debt by central banks to precisely 80% of Gross Domestic Product. The problem with higher levels of debt is that it is pretty obvious that they can never be repaid anyway, which reduces confidence amongst creditors to lend in the first place.
As for government spending, I would look for smart rather than dumb growth, investing in (infrastructure) projects around the world which would not only see a positive return, but also stimulate sustainable economic growth across the wider economy. I would also instruct the Fed, European Central Bank (ECB) and other central banks to consider more imaginative quantitative easing (QE3), but in order to get the money into the real economy, I would encourage all central banks around the world to create new money to invest in global public goods, wherever appropriate. As for money, it is ultimately an abstraction, Sydney, whether denominated in metal coins, paper notes, plastic or electronically in a bank account!
The British Museum - MoneyAll the Abrahamic religions have worried about the social evils of usury - the charging of interest. Both the Bible and the Qur'an have forthright things to say about it, from the prohibitions of Leviticus - "Thou shalt not give him money upon usury, nor lend him thy victuals for increase" (Leviticus 25:37) - to the scathing words of the Qur'an - "Those that live on usury shall rise up before God like men whom Satan has demented by his touch." (Qur'an, 2: 275)
The most recent manifestation of this age-old concern has been the rise of Sharia-compliant Islamic banking, offering services consistent with Islamic religious belief. Islamic banks are not permitted to invest in alcohol, the arms trade, pornography or gambling, and our Islamic credit card is paid for by a fixed service charge, not by interest. Here's Razi Fakih, from the Islamic wing of HSBC, known as Amanah, and based in Dubai:
This recent development, tying religion to the heart of commercial activity, runs counter to what, for most of the twentieth century, had become the received wisdom. Most intellectuals and economists from the French Revolution onwards, including Marx himself, assumed that religion would steadily dwindle as a force in public life. One of the striking facts of the first decade of the twenty-first century has been the return of religion to the centre of the political and economic stage in large parts of the world. Our gold Islamic credit card is part of that growing global phenomenon, one of many attempts to find a new accommodation between those old opponents, God and mammon.
BBC - A History of the World in 100 Objects - Credit cardUpon reflection, kleines c would argue that the current use of money is neither good nor bad, merely the end product of what has happened over the past five thousand years. Of course, the use, and usury, of money is an experiment in progress. The moral dimension seems to me to be to use our money well. One of the world's greatest philosophers, Immanuel Kant, argued that we should ethically act only according to that maxim whereby we can, at the same time, will that it should become a universal law.
I ought, therefore I can. I ought to allow the world to grow wealthier rather than poorer, Sydney, because I can allow the world to grow wealthy. There is nothing either natural or God-given about the use of money. It is just a historical process, quite a complicated one, that has built up over time. Over that period, money has worked pretty well and has played a very important role in the triumphs of humanity - and also of course in its miseries. But it has allowed the population of the world to expand beyond limits that were thought possible. Since even a few years ago, it has raised the standards of living. All these possibilities are in this little object in the link below.
BBC - A History of the World in 100 Objects - Gold coin of Croesus Out of interest, Sydney, do you still swim, and if so, do you prefer the swimming pool or the sea? I should perhaps confess that I like to swim like a whale in Wales, and the dolphins have recently taken to swimming along with me! Unfortunately, I cannot keep up with them! I don't usually take any money with me when I swim, however, not even plastic. The dolphins would not know what to do with it, and the occasional shark would probably prefer something to eat instead! Me?