The Greek fallacy: Global system needs to cut everyone’s debt, not just Greece’s

Projection.  It is one of the most common forms of ignoring one’s own issues and problems by making public these same things in someone else.  And for months now the European Union has been projecting Greek debt as the singular monetary problem to the world, when in fact almost every one of the European economies are in the same state of affairs, and under the bondage of massive debt obligations.

At the point of the spear for Europe against Greece is the continent’s largest economy and monetary force, and antagonist for wanting to indenture or enslave the Greek people in their future.  That country is of course Germany, who ironically became the Union’s greatest financial power not simply through hard work and frugal spending, but by the very same thing that Greece is wanting to do for their own economy.

Through default and not paying off their debts and obligations.

Germany is the poster child for a nation that not only didn’t pay off their debt obligations once in the 20th century, but twice.  After World War I the Big Four (France, Italy, England, and the United States) placed war reparations on Germany for their engaging in an illegal war, and causing massive loss of life and property to several countries they fought in.  And by the time the 1930’s came about, the country had paid little towards its debt to the victors, and instead defaulted on it and rebuilt their economy to a place similar to before they engaged in World War I.

Then came World War II, and the rise of the Nazi Third Reich.  During their six year campaign that was not unlike the Viking raids of 1000 years before, they looted, pillaged, and destroyed nations throughout Europe and Eurasia, and in the end relied upon hundreds of billions of dollars from the United States to rebuild once again without ever paying back what they took and what they owed to the countries they robbed and pillaged.

Which ironically included Greece.

When I hear the Germans say that they maintain a very moral stance about debt and strongly believe that debts must be repaid, then I think: what a huge joke! Germany is the country that has never repaid its debts. It has no standing to lecture other nations.

… Germany is really the single best example of a country that, throughout its history, has never repaid its external debt. Neither after the First nor the Second World War. However, it has frequently made other nations pay up, such as after the Franco-Prussian War of 1870, when it demanded massive reparations from France and indeed received them. The French state suffered for decades under this debt. The history of public debt is full of irony. It rarely follows our ideas of order and justice.

ZEIT: But we Germans have already reckoned with our own history.

Piketty: But not when it comes to repaying debts! Germany’s past, in this respect, should be of great significance to today’s Germans. Look at the history of national debt: Great Britain, Germany, and France were all once in the situation of today’s Greece, and in fact had been far more indebted. The first lesson that we can take from the history of government debt is that we are not facing a brand new problem. There have been many ways to repay debts, and not just one, which is what Berlin and Paris would have the Greeks believe. – Zeit Online

To be fair, Germany is not the only country who has failed to pay back money owed, or debt obligations incurred to other countries.  France and Britain never fully paid back the tens of billions of dollars borrowed from America to fight World War I and World War II, and both countries emerged from their destroyed economies by relying upon the Marshall Plan, funded completely by the United States following the war.

Japan too was rebuilt with U.S. taxpayer monies, and eventually grew to the point where they not only competed against America in productivity, but surpassed it in many industries including the automobile industry where at one time U.S. founded General Motors was the world’s largest corporation.

The problem isn’t Greece, or Germany, or the United States or Japan.  The problem isn’t China, or Argentina, or Venezuela, or Britain.  The problem is that the world is saturated in a a debt system so pervasive that bankers even sell and collateralize debt to make money and create even more debt.


Like the dissolving of debts after World War I and World War II, the world needs a complete ‘Jubilee’ that would allow individual nations to start again, and rebuild their economies based on production, sweat, and sound monetary policy.  But as Germany and the ECB in Europe are proving out, it’s not about solving the problems in Greece or any other country, it’s about keeping control and power over others by keeping them in debt and slavery, even with the hypocrisy that their own overwhelming debts were themselves expunged to allow them to become the economic powers they are today.

Kenneth Schortgen Jr is a writer for,, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.

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