Friday, 17 July 2015

Bankruptcy

Bankruptcy corrupts all involved , it is self perpetuating , it is immoral at all levels.

Usually Bankruptcy is a measure of last resort, but the journey there causes many heartaches and soul searching by some and  in others a "fait accompli",  just business and with no moral or understanding of the full ramifications of the consequences.

Surely there should be a way of monitoring the journey of a loan , to ensure that the repayments can be met and no to create indebtedness that we see all around us today.

Within a capitalist society, as there surely should be in any civilised society, responsibilities on both sides of any deal that is created,  lending and borrowing excessive amounts for goods and services that are not affordable in the long term has to be questioned , even if the lender is offering sweeteners and tie ins that are mainly to the benefit of the lender, as we see with on most interstate loans.

These tie-ins are often enabling the lending country huge incentives to lend further money and involve buyouts of resources within the borrowing state, and then employing the lender's capital and resources to maximise the return of the borrowings. We see this across the EU particularly in the transport and road building sectors, where germany has almost the monopoly of providing such services.
This in turn degrades the borrowing states ability to help themselves, by doing the work themselves , perhaps with help and education from the lenders, but not the action which employs local labour and the nation's own resources.

Loans should be only provided  along with education and direction with respect on both sides on which is the best way forward for the long term.
To allow bankruptcy at levels where the collateral is far lower than the assets is unforgivable, except in the position of state borrowing , where the state has no collateral of its own, it all belongs to the people of the state and any government who wants to sell its assets should be resisted at all levels. as this diverts any possible income from the borrowing state to that of the lender  as in the case of transference of rails assets for example, and another county takes any profits back home denuding the states ability to help itself still further.

The acceptance as almost normal in business that there are few consequences of going bankrupt is at the heart of where we are going and want to go as society as a whole.

The question we have to ask ourselves , should we really lend and borrow money at all, especially at high interest rates and unreasonable tie-ins? Is society ready for this sort of change?

In the state sector as in Greece and African states , surly debt cancellation or relief has to be done, but with the knowledge that it is often the poorer in all the lending states that will suffer the most!!!! So should there be a change whereby the rich are forced to take the biggest hit , as it it they who took the risk in the first place?

We need to look back sometimes at some of history's lessons and built knowledge from philosophers  like Ruskin and others to gain other insights in how we may get out of this mess.

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