[Marxism] Patrick Bond on world financial volatility
andromeda246 at hetnet.nl
Wed Dec 29 07:15:03 MST 2004
As Brenner and others on the left have shown, though coorporate profits have
risen, the weight of the evidence suggests that the rate of profit
trajectory has been downwards since the end of the long boom.If this is
true, it would suggests that financialization has been more than a matter of
policy choice for US capital, and that as Patrick Bond suggests we may be
nearing the end of the present regime of debt driven accumulation.
But that really only suggests that debt levels become unsustainable for a
segment of the population (mainly,
the lower-income group). Debt-driven accumulation could continue for quite
some time among those groups possessing significant assets. We should also
distinguish between corporate debt, government debt, and household debt.
Peculiarly, there are almost no careful and comprehensive analyses of the
structure of the total US debt by economists. I've tried to do some very
approximate calculations in February this year to get an idea of size (I
don't know how accurate they are):
Debt of all US households about $32 trillion (principally mortgage debt)
Debt of US business about $4.7 trillion
Debt of US state and local government about $1.5 trillion
Debt of US federal government about $3 trillion (gross federal debt
Total US debt $41.2 trillion, i.e. around 4x GDP and about a fifth of that
owing to foreign investors)
(I suppose you could also approach it another way, by computing the total
domestic net interest payments by category and applying an "average"
interest rate to find an annual debt repayment volume; after all, it is the
annual repayment volume that is critical here, because that is what affects
the income distribution).
As against this, (2002 estimates taken from
Government assets $6.7 trillion
Residential stock (mainly housing) $11.6 trillion
Plant & equipment of industries $11.4 trillion
Inventories $1.4 trillion
Consumer durables $3 trillion
Land $8.9 trillion
Total assets, excluding a series of financial assets (liquid funds and
claims etc.), "human capital" and R&D capital) $43 trillion.
NB - foreigners are said to own net capital assets of about $3.2 trillion in
So it looks to me like debt-driven accumulation can continue for quite some
time yet; it's just that some social classes will be "squeezed" more, and
then will be less able to spend very much.
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