State Indebtedness as a Power Strategy
by Mohssen Massarrat
Contracting debts exploded under neoliberalism since the 1980s – unlike the state debts in the Keynesian era from the 1950s to the 1970s – and produced a structural debt bondage for the overwhelming majority. The financial sector arose not surprisingly parallel to the “indebted state.”
Did the generously relieved rich and businessmen at least invest in the real economy and create jobs? Certainly not! Investment rates fell from 1980 to 2010 in the US, the EU, and Japan. In the past, increasing state indebtedness was often instrumentalized as a bogeyman for attacking the social state.