The Function of Debt
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He keeps on referring to the so-called National Debt being “our” debt and thst “we” have to pay the interest on it. But it is not our debt, something the working class owes. It is the debt of the capitalist state. Its function, within the capitalist economy, is to cover government spending which would otherwise have to be covered by higher taxation. Parenti seems to imply that it could be covered by the government simply creating more money. The government could do this — and governments have — but this doesn’t create any new wealth. If overdone it depreciates the unit in which wealth is expressed (inflation) and so causes a rise in the general price level. Which, if tax thresholds remain the same, amounts to an increase in taxation.
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