By rejecting such alleviations of debts resulting from economic disruption, the U.S. economy is subjecting itself to depression, homelessness and economic polarization. It is saving stockholders and bondholders instead of the economy at large. That is because today’s rentier interests take the economic surplus in the form of debt service, holding labor and also corporate industry in bondage. Mortgage debt is the price of obtaining a home of one’s own. Student debt is the price of getting an education to get a job. Automobile debt is needed to buy a car to drive to the job, and credit-card debt must be run up to pay for living costs beyond what one is able to earn. This deep indebtedness makes workers afraid to go on strike or even to protect working conditions, because being fired is to lose the ability to pay debts and rents. So the rising debt overhead serves the business and financial sector by lowering wage levels while extracting more interest, financial fees, rent and insurance out of their take-home pay.
But what is “normal” these days? For 95 percent of the population, their share of GDP already had been falling ever since the Obama Depression began with the bank bailout in 2009, leaving an enormous bad-debt overhead in place. The economy’s long upswing since World War II was already grinding to an end as it struggled to carry its debt burden, rising housing costs, health care and related monthly “nut.”
…. the coronavirus’s effect has been to help defeat the financial sector’s enemy – governments strong enough to regulate it. The fiscal squeeze resulting from widespread unemployment, business closedowns, rent and tax arrears is being seized upon as a means of dismantling and privatizing government at the federal, state and local levels, at the expense of the citizenry at large.How a Pandemic is Destroying the West, by Michael Hudson – Dandelion Salad