therealnews--2020-03-23--The Debt Delusion: This Is Not The Time To Worry About Deficits

This is a rush transcript and may contain errors .
It will be updated .
Greg Wilpert : It ’ s The Real News Network .
I ’ m Greg Wilpert in Arlington , Virginia .
Economies around the world are beginning to feel the massive impact that the Coronavirus pandemic is having .
The US stock market has collapsed to the level it was at three years ago , and jobless claims in the United States shot up by 33 % relative to the previous week .
In response to the crisis , governments around the world are planning @ @ @ @ @ @ @ the Trump administration is proposing $ 1 trillion for which it would provide $ 500 billion in direct payments to households and another $ 500 billion in loans to businesses .
Where will this money come from ?
How governments can deal with the economic crisis and with spending priorities more generally is an issue that a recently published book titled The Debt Delusion : Living Within Our Means and Other Fallacies proposes to address .
To discuss the book , I ’ m joined by its author , John Weeks , he @ @ @ @ @ @ @ Studies at the University of London and coordinator of the London-based Progressive Economy Forum .
Thanks for joining us again , John .
John Weeks : Thank you for inviting me along .
Greg Wilpert : So , I want to tie your book into the recent policy proposals for dealing with the Coronavirus pandemic .
However , before we get into that , we need to lay out some of the main arguments in your book about the debt delusion .
Now your book outlines five main myths that we have to @ @ @ @ @ @ @ is that we must live within our means , that governments must balance their books , we must tighten our belts , never go into debt , taxes are a burden , and that there is an alternative .
Now we can ’ t get into each one of these , but it seems to me that the first four are variants of each other , about not going into debt because it could lead to economic problems .
So before we get into discussing why this is a myth , let ’ @ @ @ @ @ @ @ many in governments make that argument .
In other words , why should governments avoid debt according to that ?
John Weeks : Well , I think that there ’ re several reasons , given the technical reasons , they aren ’ t actually technical reasons , they ’ re ideological arguments presented as technical reasons .
I will give an example .
There is the argument that increased public debt will increase public borrowing , which increase public debt but by the public sector borrowing that drives up interest rates .
It @ @ @ @ @ @ @ to borrow .
Now , on one level that is an empirical argument .
On the other level it ’ s an ideological argument because it basically says , and even if it ’ s true , why is it the problem ?
Maybe that ’ s a good thing .
So , but in fact it ’ s not true .
The interest rates at historic low , they ’ ve been at a historic low for 10 years , they ’ re even lower now than they were a month ago @ @ @ @ @ @ @ borrowing and increased government deficit will reduce the private sector is fanciful at best .
On the contrary , the more likely outcome would be nothing , government expenditure for the private sector to spend .
In fact , that ’ s exactly what the Trump administration hopes .
And the reason I might also mention the stimulus in Europe of 1.7 Trillion euros , which a foreign counter of a total economy about twice the size of the United States .
Though they ’ re divided , it ’ s not an @ @ @ @ @ @ @ , not country .
Speaker 2 : But I mean another argument though is that it ’ s unsustainable that that burden will become too difficult for countries to , for governments to eventually pay off .
What ’ s your response to that argument ?
John Weeks : Well , first of all , I think it ’ s worth noting before I get into a political explanation of it , that the financial times of London , meaning businesses , papers just had leader lead article in which it argued that @ @ @ @ @ @ @ , but more striking enough that the Italian debt was sustainable .
The Italian debt is about 120 % of GMP and they made the technical argument which the financial times knew 10 years ago when it was arguing from less depth on the technical argument was that servicing and debt is not determined by how big the debt is , but how much it costs to service it .
And so when the interest rates are very close to zero , the actual cost of the insurance costs of servicing a debt @ @ @ @ @ @ @ the numbers vary from country to country , but in most countries the servicing of debt is well below 2 % GMP .
And I might just add to that to everyone out there who says , Oh , 2 % of GMP , well that ’ s as big as you hear different things depending on the country .
That ’ s what we spend on education .
That ’ s where we spend on roads , whatever everybody will have it to be .
That interest payment goes primarily to , @ @ @ @ @ @ @ .
Some of it , a substantial portion goes to wealthy people , but majority of it goes to pension funds .
So if there ’ s anybody out there who has a pension who ’ s watching , you should cheer when you hear that the government is paying more interest on his debt because your pension fund is probably heavily invested in U.S. Government bonds .
Speaker 2 : That brings me to another issue that you bring up in your book , which is that of course a large chunk @ @ @ @ @ @ @ answer just now also kind of allude to it , a large chunk , if it ’ s not going to the pension funds goes to other people who are wealthy .
That is the interest payments go to people who are wealthy , making them potentially more wealthy and thereby wouldn ’ t that increase inequality in the country ?
In other words , if the government goes into greater debt , it essentially enables a greater inequality .
Is that wrong ?
John Weeks : In appearance form , that ’ @ @ @ @ @ @ @ to make .
One , we shouldn ’ t exaggerate that , as I said , one of the largest , I think the largest single source , obviously this depends on the country .
This would be true for the United States and for Britain and for Germany .
It wouldn ’ t be true for Bulgaria , but the four most large countries , the single largest , yet hold older public yet are pension funds and while people who receive pensions are there , in some cases their incomes are @ @ @ @ @ @ @ States , the social security fund is primarily in public bonds and so , transfers of interest payment to the social security system would not make income distribution worse .
Second of all , there is a problem that you can easily solve with higher marginal tax rates , so you can work out easily enough how much of the government interest is going to the wealthy , say the richest 10 % or 25 % , whatever you have to choose and began to raise taxes for those recipients accordingly .
We @ @ @ @ @ @ @ portion of GMP I must say .
If the overall interest is 2 % of GMP , well , the wealthy portion of the population will be well below 1 % and that ’ s to be easily handled through a very modest increase in tax rates on the wealthy .
Speaker 2 : Mm-hmm ( affirmative ) .
Now , but that brings us to the fifth myth that you talk about in your book , which is that taxes are a burden .
Now , this one probably feels very logical @ @ @ @ @ @ @ we see our gross pay on our paycheck and we see that the government takes a significant chunk out of that pay , usually between 20 and 30 % depending on your income tax bracket and your personal circumstances .
Now , isn ’ t this a burden to the individual and isn ’ t that money that we can not spend and that ’ s in effect taken out of circulation ?
John Weeks : Let me say first of all , that people that pay US tax , and even though @ @ @ @ @ @ @ social security so I pay US tax .
I would pay US tax , but I have to pay a British tax instead .
There ’ s a joint tax agreement and the British tax is about 30 % and 20 % .
Now , should I groan about it ?
Let me give an example .
In Britain , there ’ s something called the National Health Service .
If we didn ’ t have the National Health Service and that is funded by taxation .
If we didn ’ t have @ @ @ @ @ @ @ have to have private health insurance .
That private health insurance would be an expenditure instead of the taxation and actually it turns out then that National Health , the taxes I pay on the National Health are much lower than they would be if I bought private insurance , I mean I ’ m not speculating about that .
I ’ ve done the work in Missouri and it is a fact .
If you wanted to get private health insurance in Britain for a person my age in the 70s , @ @ @ @ @ @ @ , $ 1,500 a month .
Now for National Health , I ’ m probably paying $ 300 or $ 400 a month .
Now , if they cut my National Health expenditure and said , okay , just you ’ ve got $ 300 or $ 400 , go out and spend it yourself anyway you want to , well , I have to spend it on healthcare because I have health issues , would I save any money ?
Absolutely not , I wouldn ’ t save any money .
I @ @ @ @ @ @ @ many things that we do are the same way .
You think about schools , well they just give people money and let them pay for their own schools .
It will be far more expensive than if the government paid for it .
I mean , and we don ’ t say let people build their own roads .
I guess a few far out people on the right do argue that , but very few people do .
So what you want to always think when you say taxes are a @ @ @ @ @ @ @ used and if I didn ’ t have the service associated with those taxes , what would it cost me ?
Speaker 2 : Hmm .
Now the last method you explore in your book is that there is no alternative .
The Tina principle that Mark Good saturate coin .
Now this Smith rather , it can easily become rather complicated I would say because there are so many alternatives one could consider , but let ’ s focus on just one that is the role of central banks or of the @ @ @ @ @ @ @ United States .
That is , you ’ re , to a large extent , it seems your argument in your book is centered around the role that the central bank could be playing in creating alternatives .
Now talk about how central banks ’ roles have been limited into not creating an alternative and why that ’ s a mistake ?
John Weeks : The first point I want to make is , the important thing about the central bank is when a government has its own currency .
So the US @ @ @ @ @ @ @ pound , the Chinese have a currency , the Japanese have a currency , European Union , the members of the European Union do not have their own currency .
There is a common currency among them .
That is the big difference because of institutional reasons , doesn ’ t have to be this way , but because of the institutional reasons , that means that the Finnish government , American government , the Japanese government can bought all from themselves and while many of the European governments can not borrow from @ @ @ @ @ @ @ that .
So when you have your own currency , you can borrow from yourself and that means that in effect , you borrow from yourself , you pay your interest to yourself and it ’ s costless .
In the case of the United States , about 27 % of the national debt is held by the Federal Reserve system and another large portion is held by the Social Security system as I mentioned , but the part held by the Federal Reserve system is just recycled back into the US government @ @ @ @ @ @ @ first point .
Second point I would make is that central banks , it could be the Federal Reserve system , Bank of England , should be responsive to government policy , they should not be independent .
That is everyone should presume .
No .
If those organizations are truly independent , then they can make decisions which are contrary to the democratic decisions raised and pass through our Congress .
So it ’ s quite important that the role of the central bank be complimentary to fiscal policy as implemented through @ @ @ @ @ @ @ Speaker 2 : My final question is , and it seems like the Federal Reserve is actually perhaps coordinating to some extent with the Trump administration and especially considering that the Trump administration has now submitted a bill or proposal to Congress for addressing the economic crisis and the Federal Reserve would be involved presumably to some extent .
Now , and the rescue package is over a trillion dollars or about a trillion dollars right now for the United States and as you mentioned , 1.7 trillion for the European central bank @ @ @ @ @ @ @ proposals ?
John Weeks : Well , the first was you ’ re quite right about the European central bank .
Though I think that the sum that they said is 720 billion , 750 billion Euro and the 1.7 is actually a fiscal expenditure .
Now , I might just say the difference between the two a fiscal expenditure is , for example , when Trump administration , it says everybody ’ s going to get $ 1,200 or everyone ’ s going to get $ 2,000 whatever it happens to be @ @ @ @ @ @ @ the Federal Reserve system purchasing back US government bonds or having sold US government bonds to cover the expenditure previously transferred those funds to the US government .
Now it buys those bonds back and so it purchases them with money too .
Bank X holds bonds and sells bonds to the Federal Reserve system and the Federal Reserve system gives money to that bank .
That bank then has hoped we ’ ll use that cash to lend out and in a what ’ s called a fractional reserve system , if @ @ @ @ @ @ @ can then have a very large multiple of that .
Now , that will only happen if banks find a demand for loans .
If businesses don ’ t want to borrow because the economy ’ s depressed , then the bank money just sits idle .
So much more important , well , I ’ m certainly not opposed to the Federal Reserve system , the Europeans central bank expanding credit by purchasing bonds , you must keep in mind that it is absolutely essential to that is a fiscal response that @ @ @ @ @ @ @ and by people , which then puts businesses in a position to say , Oh , we need to borrow money in order to expand production .
So you might say the really important impetus here is the fiscal expansion and the monetary expansion is , you might say permissive .
Speaker 2 : Okay .
Well , we ’ re going to leave it there for now .
Hopefully we ’ ll come back to you once we have a clear idea as to exactly how these economic rescue packages look like @ @ @ @ @ @ @ little bit deeper as to what we can expect from them and what they could be doing .
But we ’ ll leave it there .
I was speaking to John Weeks professor emeritus of development studies at the University of London .
Thanks again , John for having joined us today .

Economist John Weeks says his new book, “The Debt Delusion: Living Within Our Means and Other Fallacies,” applies to the coming economic crisis caused by the coronavirus outbreak.
Story Transcript
This is a rush transcript and may contain errors. It will be updated.
Greg Wilpert: It’s The Real News Network. I’m Greg Wilpert in Arlington, Virginia. Economies around the world are beginning to feel the massive impact that the Coronavirus pandemic is having. The US stock market has collapsed to the level it was at three years ago, and jobless claims in the United States shot up by 33% relative to the previous week.
In response to the crisis, governments around the world are planning economic rescue packages. For example, the Trump administration is proposing $1 trillion for which it would provide $500 billion in direct payments to households and another $500 billion in loans to businesses. Where will this money come from?
How governments can deal with the economic crisis and with spending priorities more generally is an issue that a recently published book titled The Debt Delusion: Living Within Our Means and Other Fallacies proposes to address. To discuss the book, I’m joined by its author, John Weeks, he’s a Professor Emeritus of Development Studies at the University of London and coordinator of the London-based Progressive Economy Forum. Thanks for joining us again, John.
John Weeks: Thank you for inviting me along.
Greg Wilpert: So, I want to tie your book into the recent policy proposals for dealing with the Coronavirus pandemic. However, before we get into that, we need to lay out some of the main arguments in your book about the debt delusion. Now your book outlines five main myths that we have to deal with debt. The first one is that we must live within our means, that governments must balance their books, we must tighten our belts, never go into debt, taxes are a burden, and that there is an alternative.
Now we can’t get into each one of these, but it seems to me that the first four are variants of each other, about not going into debt because it could lead to economic problems. So before we get into discussing why this is a myth, let’s focus on why mainstream economists and many in governments make that argument. In other words, why should governments avoid debt according to that?
John Weeks: Well, I think that there’re several reasons, given the technical reasons, they aren’t actually technical reasons, they’re ideological arguments presented as technical reasons. I will give an example. There is the argument that increased public debt will increase public borrowing, which increase public debt but by the public sector borrowing that drives up interest rates. It leaves less space for the private sector to borrow.
Now, on one level that is an empirical argument. On the other level it’s an ideological argument because it basically says, and even if it’s true, why is it the problem? Maybe that’s a good thing. So, but in fact it’s not true. The interest rates at historic low, they’ve been at a historic low for 10 years, they’re even lower now than they were a month ago. And the possibility that increased government borrowing and increased government deficit will reduce the private sector is fanciful at best. On the contrary, the more likely outcome would be nothing, government expenditure for the private sector to spend. In fact, that’s exactly what the Trump administration hopes. And the reason I might also mention the stimulus in Europe of 1.7 Trillion euros, which a foreign counter of a total economy about twice the size of the United States. Though they’re divided, it’s not an aggregate stimulus. It is one country, not country.
Speaker 2: But I mean another argument though is that it’s unsustainable that that burden will become too difficult for countries to, for governments to eventually pay off. What’s your response to that argument?
John Weeks: Well, first of all, I think it’s worth noting before I get into a political explanation of it, that the financial times of London, meaning businesses, papers just had leader lead article in which it argued that not only was the Vinny steps sustainable, but more striking enough that the Italian debt was sustainable. The Italian debt is about 120% of GMP and they made the technical argument which the financial times knew 10 years ago when it was arguing from less depth on the technical argument was that servicing and debt is not determined by how big the debt is, but how much it costs to service it. And so when the interest rates are very close to zero, the actual cost of the insurance costs of servicing a debt is quite small, quite manageable and the numbers vary from country to country, but in most countries the servicing of debt is well below 2% GMP.
And I might just add to that to everyone out there who says, Oh, 2% of GMP, well that’s as big as you hear different things depending on the country. That’s what we spend on education. That’s where we spend on roads, whatever everybody will have it to be. That interest payment goes primarily to, in developed countries, to pension funds. Some of it, a substantial portion goes to wealthy people, but majority of it goes to pension funds. So if there’s anybody out there who has a pension who’s watching, you should cheer when you hear that the government is paying more interest on his debt because your pension fund is probably heavily invested in U.S. Government bonds.
Speaker 2: That brings me to another issue that you bring up in your book, which is that of course a large chunk, and you just now in your answer just now also kind of allude to it, a large chunk, if it’s not going to the pension funds goes to other people who are wealthy. That is the interest payments go to people who are wealthy, making them potentially more wealthy and thereby wouldn’t that increase inequality in the country? In other words, if the government goes into greater debt, it essentially enables a greater inequality. Is that wrong?
John Weeks: In appearance form, that’s correct. There are two points to make. One, we shouldn’t exaggerate that, as I said, one of the largest, I think the largest single source, obviously this depends on the country. This would be true for the United States and for Britain and for Germany. It wouldn’t be true for Bulgaria, but the four most large countries, the single largest, yet hold older public yet are pension funds and while people who receive pensions are there, in some cases their incomes are above the average thinking on the United States, the social security fund is primarily in public bonds and so, transfers of interest payment to the social security system would not make income distribution worse.
Second of all, there is a problem that you can easily solve with higher marginal tax rates, so you can work out easily enough how much of the government interest is going to the wealthy, say the richest 10% or 25%, whatever you have to choose and began to raise taxes for those recipients accordingly. We’re talking about a relatively small portion of GMP I must say. If the overall interest is 2% of GMP, well, the wealthy portion of the population will be well below 1% and that’s to be easily handled through a very modest increase in tax rates on the wealthy.
Speaker 2: Mm-hmm (affirmative). Now, but that brings us to the fifth myth that you talk about in your book, which is that taxes are a burden. Now, this one probably feels very logical to most people. I mean, we see our gross pay on our paycheck and we see that the government takes a significant chunk out of that pay, usually between 20 and 30% depending on your income tax bracket and your personal circumstances. Now, isn’t this a burden to the individual and isn’t that money that we cannot spend and that’s in effect taken out of circulation?
John Weeks: Let me say first of all, that people that pay US tax, and even though I live in Britain, I receive social security so I pay US tax. I would pay US tax, but I have to pay a British tax instead. There’s a joint tax agreement and the British tax is about 30% and 20%. Now, should I groan about it? Let me give an example. In Britain, there’s something called the National Health Service. If we didn’t have the National Health Service and that is funded by taxation. If we didn’t have a National Health Service, I would have to have private health insurance. That private health insurance would be an expenditure instead of the taxation and actually it turns out then that National Health, the taxes I pay on the National Health are much lower than they would be if I bought private insurance, I mean I’m not speculating about that.
I’ve done the work in Missouri and it is a fact. If you wanted to get private health insurance in Britain for a person my age in the 70s, it would be $1,000 a month, $1,500 a month. Now for National Health, I’m probably paying $300 or $400 a month.
Now, if they cut my National Health expenditure and said, okay, just you’ve got $300 or $400, go out and spend it yourself anyway you want to, well, I have to spend it on healthcare because I have health issues, would I save any money? Absolutely not, I wouldn’t save any money. I would end up spending more money and many things that we do are the same way. You think about schools, well they just give people money and let them pay for their own schools. It will be far more expensive than if the government paid for it. I mean, and we don’t say let people build their own roads. I guess a few far out people on the right do argue that, but very few people do. So what you want to always think when you say taxes are a burden, how are my taxes being used and if I didn’t have the service associated with those taxes, what would it cost me?
Speaker 2: Hmm. Now the last method you explore in your book is that there is no alternative. The Tina principle that Mark Good saturate coin. Now this Smith rather, it can easily become rather complicated I would say because there are so many alternatives one could consider, but let’s focus on just one that is the role of central banks or of the federal reserve in the case of the United States. That is, you’re, to a large extent, it seems your argument in your book is centered around the role that the central bank could be playing in creating alternatives. Now talk about how central banks’ roles have been limited into not creating an alternative and why that’s a mistake?
John Weeks: The first point I want to make is, the important thing about the central bank is when a government has its own currency. So the US has the dollar, Britain has the pound, the Chinese have a currency, the Japanese have a currency, European Union, the members of the European Union do not have their own currency. There is a common currency among them. That is the big difference because of institutional reasons, doesn’t have to be this way, but because of the institutional reasons, that means that the Finnish government, American government, the Japanese government can bought all from themselves and while many of the European governments cannot borrow from themselves, they are prohibited from doing that.
So when you have your own currency, you can borrow from yourself and that means that in effect, you borrow from yourself, you pay your interest to yourself and it’s costless. In the case of the United States, about 27% of the national debt is held by the Federal Reserve system and another large portion is held by the Social Security system as I mentioned, but the part held by the Federal Reserve system is just recycled back into the US government. So, that’s the first point.
Second point I would make is that central banks, it could be the Federal Reserve system, Bank of England, should be responsive to government policy, they should not be independent. That is everyone should presume. No. If those organizations are truly independent, then they can make decisions which are contrary to the democratic decisions raised and pass through our Congress. So it’s quite important that the role of the central bank be complimentary to fiscal policy as implemented through the Congress and through the Executive.
Speaker 2: My final question is, and it seems like the Federal Reserve is actually perhaps coordinating to some extent with the Trump administration and especially considering that the Trump administration has now submitted a bill or proposal to Congress for addressing the economic crisis and the Federal Reserve would be involved presumably to some extent. Now, and the rescue package is over a trillion dollars or about a trillion dollars right now for the United States and as you mentioned, 1.7 trillion for the European central bank, what do you make of those proposals?
John Weeks: Well, the first was you’re quite right about the European central bank. Though I think that the sum that they said is 720 billion, 750 billion Euro and the 1.7 is actually a fiscal expenditure. Now, I might just say the difference between the two a fiscal expenditure is, for example, when Trump administration, it says everybody’s going to get $1,200 or everyone’s going to get $2,000 whatever it happens to be. While the monetary stimulus comes by the Federal Reserve system purchasing back US government bonds or having sold US government bonds to cover the expenditure previously transferred those funds to the US government. Now it buys those bonds back and so it purchases them with money too. Bank X holds bonds and sells bonds to the Federal Reserve system and the Federal Reserve system gives money to that bank. That bank then has hoped we’ll use that cash to lend out and in a what’s called a fractional reserve system, if they got a billion dollars, they can then have a very large multiple of that.
Now, that will only happen if banks find a demand for loans. If businesses don’t want to borrow because the economy’s depressed, then the bank money just sits idle. So much more important, well, I’m certainly not opposed to the Federal Reserve system, the Europeans central bank expanding credit by purchasing bonds, you must keep in mind that it is absolutely essential to that is a fiscal response that increases demand, that expenditure by businesses and by people, which then puts businesses in a position to say, Oh, we need to borrow money in order to expand production. So you might say the really important impetus here is the fiscal expansion and the monetary expansion is, you might say permissive.
Speaker 2: Okay. Well, we’re going to leave it there for now. Hopefully we’ll come back to you once we have a clear idea as to exactly how these economic rescue packages look like and then maybe we can dig a little bit deeper as to what we can expect from them and what they could be doing. But we’ll leave it there. I was speaking to John Weeks professor emeritus of development studies at the University of London. Thanks again, John for having joined us today.
John Weeks: Thank you.
Production: Genevieve Montinar, Will Arenas
Studio: Will Arenas
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therealnews--2020-03-23--Venezuela’s Communes: Still Here, Still Fighting

High on the edge of the barrios of Western Caracas , up on the hillside of the Waraira Repano mountain , members of this local commune are clearing land to begin planting corn .
Once it ’ s ready to harvest , they want to grind the corn into flour for arepas .
That ’ s a staple in the Venezuelan diet .
But because of inflation and financial crisis , most Venezuelans have had to do without corn flour and arepas .
It ’ s just too expensive .
“ Today we are beginning our work for our plan @ @ @ @ @ @ @ we developed to strengthen our local productions and to help us achieve self-sustainability .
It ’ s also a way to fight against the U.S. blockade and defend what is ours and produce the food that we need , which we believe is vital for any commune and for the country.
” Jesus is a member of the Altos de Lidice commune , which is composed of roughly seven communal councils and 2,000 residents in the Caracas barrio of La Pastora .
There are few signs here that distinguish this commune from any @ @ @ @ @ @ @ .
But the residents know .
The commune is important .
Spokespeople meet weekly or biweekly .
It ’ s participatory and direct democracy at work .
The government of Hugo Chavez began to encourage communities to organize communal councils in 2006 as a means of empowering residents to address the local concerns in their neighborhoods .
Communes began to be formed a few years later , as larger territorial groupings of numerous communal councils .
It ’ s all meant to complement the country ’ s representative democracy .
Down the hill @ @ @ @ @ @ @ local sport ’ s committee are hard at work .
“ We didn ’ t have room for a court in the neighborhood , but we are making one in the street , and painting it to have our communal basketball tournament.
” “ The community is out .
Everyone is focused on the quality of the court , for the good of our community and the kids .
And everyone , from the smallest to the oldest children , are helping out with the painting.
” Down the street , members of @ @ @ @ @ @ @ are discussing their self-managed pharmacy .
“ We cover the need with medicine that we receive from donations from other countries , which we welcome with an open heart , because it ’ s the only way to fight the crisis and cover the medical needs in our community.
” They meet in a neighborhood home or in one of the neighborhood ’ s Barrio Adentro health clinics , where they coordinate with the local community doctor .
This is just one commune , in one of Caracas ’ poor barrios that has @ @ @ @ @ @ @ news is obsessed with Maduro and Guaido , it completely ignores the grassroots organizing at the heart of the Bolivarian process that continues to happen around the clock in the communes of poor barrios around the country .
“ There are approximately 2,000 communes in Venezuela .
They are very important , because they are the government of the residents of the locale .
It ’ s the people , the neighbors , governing over things that are very concrete , like water , transportation , services , health , education .
And @ @ @ @ @ @ @ deciding their destiny in citizen assemblies.
” “ Before we had public transportation up here , but because of the blockade , many of the cars are broken and that ’ s the situation we are trying to resolve.
” The government has found some funds and it ’ s providing the community with vehicles to run their neighborhood transportation service at discounted rates .
If it works , it ’ ll be a win-win .
Community members get much-needed transportation .
The funds collected go to their neighbors who are running the @ @ @ @ @ @ @ before they have to start paying off the vehicles .
They are meeting to finalize the details .
Like this , most communes have a tight relationship with the government .
They receive the government-issued subsidized boxes of food known as CLAP and distribute them to the community .
The boxes are a lifeline for may poor Venezuelan families amid hyperinflation and out-of-control food prices .
The communes are also the link between the social missions , such as Barrio Adentro , and the local community .
But they are not free from @ @ @ @ @ @ @ ton of problems .
We are not going to pretend they don ’ t exist .
We are very self-critical of the revolution , because we want the revolution to be real , but we also know that there are complex realities , like the evil role of the United States in deepening our crisis.
” Some of the communes are also building connections , supporting each others ’ work , andcreating networks of communes .
The rural El Maizal commune in Lara state provided the local produce to be sold here through @ @ @ @ @ @ @ .
“ The people in these territories have seen the importance of resolving their problems together .
Realizing that we have the answers to our own problems has been the key to consolidating the communes and the developing and growing new ones .
”

About 2,000 grassroots communes maintain direct and participatory democracy in the face of the country’s economic crisis. This report was filmed before the COVID-19 pandemic began to affect everyday life in Venezuela.
Story Transcript
High on the edge of the barrios of Western Caracas, up on the hillside of the Waraira Repano mountain, members of this local commune are clearing land to begin planting corn.
Once it’s ready to harvest, they want to grind the corn into flour for arepas. That’s a staple in the Venezuelan diet. But because of inflation and financial crisis, most Venezuelans have had to do without corn flour and arepas. It’s just too expensive.
Gsus Garcias, Altos de Lidice commune
“Today we are beginning our work for our plan for communal planting. A plan that we developed to strengthen our local productions and to help us achieve self-sustainability. It’s also a way to fight against the U.S. blockade and defend what is ours and produce the food that we need, which we believe is vital for any commune and for the country.”
Jesus is a member of the Altos de Lidice commune, which is composed of roughly seven communal councils and 2,000 residents in the Caracas barrio of La Pastora. There are few signs here that distinguish this commune from any other stretch of barrio in Western Caracas. But the residents know. The commune is important. Spokespeople meet weekly or biweekly. It’s participatory and direct democracy at work. The government of Hugo Chavez began to encourage communities to organize communal councils in 2006 as a means of empowering residents to address the local concerns in their neighborhoods. Communes began to be formed a few years later, as larger territorial groupings of numerous communal councils. It’s all meant to complement the country’s representative democracy.
Down the hill, members of the commune’s local sport’s committee are hard at work.
Victor Bello
“We didn’t have room for a court in the neighborhood, but we are making one in the street, and painting it to have our communal basketball tournament.”
Jofran Pellegrino, Altos de Lidice commune
“The community is out. Everyone is focused on the quality of the court, for the good of our community and the kids. And everyone, from the smallest to the oldest children, are helping out with the painting.”
Down the street, members of the commune’s health working group are discussing their self-managed pharmacy.
Rosiris Zapateiro, Health Committee, Altos de Lidice commune
“We cover the need with medicine that we receive from donations from other countries, which we welcome with an open heart, because it’s the only way to fight the crisis and cover the medical needs in our community.”
They meet in a neighborhood home or in one of the neighborhood’s Barrio Adentro health clinics, where they coordinate with the local community doctor.
This is just one commune, in one of Caracas’ poor barrios that has been organizing from below.
While the news is obsessed with Maduro and Guaido, it completely ignores the grassroots organizing at the heart of the Bolivarian process that continues to happen around the clock in the communes of poor barrios around the country.
Atanea Jimenez, National Network of Commune Members
“There are approximately 2,000 communes in Venezuela. They are very important, because they are the government of the residents of the locale. It’s the people, the neighbors, governing over things that are very concrete, like water, transportation, services, health, education. And they are the residents of the locale deciding their destiny in citizen assemblies.”
Across town, in the barrio of Antimano, the local commune has created a project to begin a transportation service to help residents get to their homes high up in the barrio. With the U.S. blockade, financial crisis, and hyperinflation, transportation costs have risen, as replacement car parts have grown scarce and expensive.
Merwin Marinez, Frente Comando de Transporte Carapita La Yaguara
“Before we had public transportation up here, but because of the blockade, many of the cars are broken and that’s the situation we are trying to resolve.”
The government has found some funds and it’s providing the community with vehicles to run their neighborhood transportation service at discounted rates. If it works, it’ll be a win-win. Community members get much-needed transportation. The funds collected go to their neighbors who are running the service. They have one year down before they have to start paying off the vehicles. They are meeting to finalize the details.
Like this, most communes have a tight relationship with the government. They receive the government-issued subsidized boxes of food known as CLAP and distribute them to the community. The boxes are a lifeline for may poor Venezuelan families amid hyperinflation and out-of-control food prices.
The communes are also the link between the social missions, such as Barrio Adentro, and the local community.
But they are not free from criticism.
Gsus Garcias, Altos de Lidice commune
“The state has a ton of problems. We are not going to pretend they don’t exist. We are very self-critical of the revolution, because we want the revolution to be real, but we also know that there are complex realities, like the evil role of the United States in deepening our crisis.”
Some of the communes are also building connections, supporting each others’ work, andcreating networks of communes.
The rural El Maizal commune in Lara state provided the local produce to be sold here through this cooperative in San Augustin at low-cost.
Atanea Jimenez, National Network of Commune Members
“The people in these territories have seen the importance of resolving their problems together. Realizing that we have the answers to our own problems has been the key to consolidating the communes and the developing and growing new ones.”
Michael Fox, The Real News, Caracas, Venezuela.
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therealnews--2020-03-23--How The IMF Can Help The Global South Cope With Imminent Economic Crisis

This is a rush transcript and may contain errors .
It will be updated .
Greg Wilpert : It ’ s The Real News Network .
I ’ m Greg Wilpert in Arlington , Virginia .
The global economy is facing its worst crisis since the so-called great recession of 2008 , 2009 .
Economic forecast such as from the OECD state that the coronavirus outbreak could have global economic growth this year to 1.5 % .
That would be the slowest rate since 2009 .
Much of that prediction is based on the fact that China ’ s economy @ @ @ @ @ @ @ government ’ s efforts to halt the spread of the coronavirus .
For example , Fortune Magazine conducted a survey recently which showed that already 94 % of the world ’ s largest 1000 companies are experiencing problems in their supply chains because of the coronavirus epidemic .
The effects of the economic slowdown is potentially devastating for countries of the Global South that make up an integral part of the global supply chain .
Already , commodity prices for products such as oil , steel , natural gas , and pork , @ @ @ @ @ @ @ As a result , unless the pandemic is overcome very quickly , countries in the Global South will face problems in what is known as their balance of payments .
That is their ability to pay for badly needed imports with the income that they receive from goods that they export .
Is there anything that can be done on an international level to help countries deal with this crisis ?
Joining me now to discuss this question is Andrés Arauz .
He is a senior research fellow at the Center for Economic @ @ @ @ @ @ @ former minister of knowledge and a former Central Bank general director of Ecuador .
He joins us today from Mexico City .
Thanks for being here again , Andrés .
Andrés Arauz : Hi , Greg .
It ’ s a pleasure to be here and to talk about this .
Greg Wilpert : Before we get into what can be done about the impending global economic crisis , let ’ s take a closer look at what this crisis means for countries of the Global South .
I mentioned that countries would @ @ @ @ @ @ @ would this mean for the lives of ordinary people in the countries of South America or Africa , for example ?
Andrés Arauz : Like you mentioned , the balance of payments problems create a macroeconomic problem because most currencies of the Global South will have to depreciate or lose their value .
That immediately impacts the populations of the Global South in terms of the purchasing power of their citizens .
That ’ s the quickest way the macro problem will hurt them .
But then the pandemia itself will imply very @ @ @ @ @ @ @ Global South in terms of the preparedness of their national health systems to deal with this .
There ’ s also an interrelation there between the preparedness of the health system and the balance of payments because many times the domestic economies of the Global South are not prepared in terms of their production and supply chains for the materials , the equipment , the capital goods , the beds , even basic hospital equipment that will surge in the short term and that is not produced locally , so that will imply @ @ @ @ @ @ @ same needs occurring at the same time all over the planet that will imply that they will either be very expensive or not accessible at all .
That will impair the ability of national governments in the Global South to reply to the pandemic itself .
Many other countries around the world also have a chronic lack of food sovereignty or food security .
Because there is now pressure to keep domestic resources within domestic economies , we ’ ve seen export restrictions .
For example , from the European Union on medical @ @ @ @ @ @ @ food items .
This will also impact heavily those food insecure countries in the Global South .
The situation can rapidly become a humanitarian crisis if society at large , and by this I mean the entire human species , doesn ’ t take into account the needs and the urgencies of the Global South .
Greg Wilpert : What can be done about this problem on a macroeconomic level ?
What can international financial institutions , for example , do to address this impending crisis ?
Andrés Arauz : It ’ s @ @ @ @ @ @ @ macroeconomic issues not be an actual issue right now .
All the energy right now has to go into solving real-world food and the health issues and not balance of payments issues or lack of money .
As we ’ ve seen in the first world and the center , we ’ ve seen politicians and central bankers saying , “ We ’ ll do whatever it takes .
We ’ ll print as much money as necessary so that the monetary dimension is not a problem when dealing with this global pandemic.
@ @ @ @ @ @ @ for the Global South .
The difference is if you have a central banker from a central African country say , “ We ’ re going to print as much money as necessary , ” that will immediately create a devaluation of their currency , the balance of payments and macroeconomic issues that we all know about .
That ’ s why we need the whatever-it-takes statement to come from international financial institutions .
In this case , it would be specifically the International Monetary Fund , not by saying , “ We @ @ @ @ @ @ @ and reducing size of your public sector , ” when that ’ s absolutely not what is needed right now , but by issuing , what are called , special drawing rights , which is a global currency that the IMF issues out of thin air and have that money be available to all of the countries , central banks so that they don ’ t have those payments restrictions for international trade and so that the domestic macroeconomic problems are not added onto the already critical situation regarding the pandemia and the @ @ @ @ @ @ @ Wilpert : Can you explain a little bit more about how these special drawing rights , the SDRs , as they ’ re known , how that works ?
Is it something that they can then use for imports ?
Do other countries or companies , businesses accept them ?
How would that work ?
Andrés Arauz : This is a global currency that ’ s only used by central banks .
It ’ s issued by the International Monetary Fund .
It was created in the late ’ 60s and likely used @ @ @ @ @ @ @ during a long time it was forgotten .
It was parked on the Central Bank ’ s balance sheets and everybody ignored them .
However , in 2008 and 2009 the United Nations General Assembly called on the International Monetary Fund to issue again these special drawing rights so they could be used for countries that were in balance of payments crisis .
The IMF did so after a [ inaudible 00:07:35 ] by the G20 .
In summer of 2009 , the IMF issued $ 187 billion worth of these SDRs that @ @ @ @ @ @ @ time .
It was allocated or distributed to all of the countries in the world .
Of course , because the distribution mimics the IMF voting power , most of them went to the rich countries that didn ’ t use them at all .
They just left them unused in the balance sheets .
The poorer countries , for example , African countries , like the Democratic Republic of Congo , like Gambia , like Tajikistan , and even Ecuador , I was at the Central Bank at the time , we @ @ @ @ @ @ @ of these SDRs .
We cashed those SDRs immediately , got dollars for them and used them to pay for imports .
Companies and citizens don ’ t accept SDRs .
They are only a currency to be used among central banks .
But this is precisely the situation that we are facing now because most of the humanitarian and emergency trade that we ’ ll be seeing in the next few days will be interstates trade .
They will be state- owned everything right now .
It is reasonable to use SDRs @ @ @ @ @ @ @ even some certainly international debts related to [ inaudible 00:09:06 ] .
Greg Wilpert : Before I get into whether or not this is being considered , I wanted to ask another question that ’ s related .
During the Great Recession of 2008 , a lot of financial liquidity was created when central banks pumped extra cash into the global economy .
Much of that money ended up in various forms in countries of the Global South , which is now leaving those countries .
Talk a little bit about how this @ @ @ @ @ @ @ speak , after effects of 2009 are effecting the economies of the Global South now .
Andrés Arauz : I will divide that question into two .
First , how does that money… those quantitative [ inaudible 00:09:52 ] and those whatever-it-takes moments from a decade ago , how ’ d that money reach the countries of the Global South ?
For that it ’ s very important to understand that a special channel , or a special road , or a special highway was set up between the US Federal Reserve and @ @ @ @ @ @ @ , what are called , the foreign exchange swap lines , which allowed certain countries to have access to US dollars in exchange for giving local currency to the US fed .
Of course , the US fed wasn ’ t going to do anything with those local currencies , but it was a global bail out of certain countries in the Global South and typical US allies in the Northern Hemisphere .
That path that was set up allowed for global investments or capital flows to go to those countries , but @ @ @ @ @ @ @ .
It wasn ’ t like the stock markets in Mauritania or in Bolivia also received those in flows .
It was the most financialized , emerging markets that received those in flows .
What ’ s happening now is that after a buoyant decade of capital flows that have achieved those emerging markets , when there is a panic they withdraw immediately and go back from the periphery back to the center .
That ’ s what we ’ ve seen .
Over $ 80 billion worth of capital [ inaudible 00:11:31 @ @ @ @ @ @ @ as reported by the [ International Financial Institute 00:11:34 ] .
This is very critical because it is four times larger than what we saw in the initial phase of the 2008 crisis when capital flew back from the third world countries to the core countries and the rich countries of the world .
There is a grave situation there .
That ’ s why we also need the SDRs so that these capital withdrawals do not become another issue in the minds of policymakers that already have to deal with on-the-ground , @ @ @ @ @ @ @ I think that ’ s an interesting point .
That makes the situation even more difficult on top of the problem of collapsing supply chains .
Have you seen any kind of reaction or anybody picking up the ideas , particularly people in power , who might be able to implement this idea of issuing SDRs to countries of the South ?
Andrés Arauz : Yeah , definitely .
After the article was published there have been sequels published already two or more times in the Financial Times .
There was an article @ @ @ @ @ @ @ by Gallagher and Ocampo .
Ocampo especially is a interesting character there because he is part of several UN-based commissions .
He was also part of the [ Stiglitz Commission 00:00:13:17 ] in 2009 that also pushed for the issuance of SDRs that year .
He is based in New York and he has the possibility to influence decision makers around the world .
I have information also that in the IMF the situation is starting to be discussed , because this is the only universal mechanism of liquidity provision .
Swap lines @ @ @ @ @ @ @ few chosen ones that have access to the US fed swap lines .
But not all of the countries in the world .
They ’ re over almost 200 countries and only about 10 % will have access to the fed .
We need this mechanism for the rest of the world and we hope that that happens as soon as possible in very large dimensions .
This is not a time for small issuance of a few billion dollars .
We need , like I mentioned in the article , $ 3 @ @ @ @ @ @ @ enough number that will stave off speculators hedging against the domestic currencies that will give policymakers enough room to pay for these humanitarian-based imports .
It has to be a huge issuance .
This is not only about satisfying the financial markets .
Greg Wilpert : It would , of course , boost the global economy .
We ’ re going to have to leave it there for now .
I was speaking to Andrés Arauz , Senior Research Fellow at the Center for Economic and Policy Research .
Thanks again , Andrés @ @ @ @ @ @ @ Greg Wilpert : And thank you for joining The Real News Network .

The International Monetary Fund has a rarely used mechanism that could alleviate the economic crisis faced by the Global South in the wake of COVID-19.
Story Transcript
This is a rush transcript and may contain errors. It will be updated.
Greg Wilpert: It’s The Real News Network. I’m Greg Wilpert in Arlington, Virginia. The global economy is facing its worst crisis since the so-called great recession of 2008, 2009. Economic forecast such as from the OECD state that the coronavirus outbreak could have global economic growth this year to 1.5%. That would be the slowest rate since 2009. Much of that prediction is based on the fact that China’s economy slowed down significantly already because of the government’s efforts to halt the spread of the coronavirus.
For example, Fortune Magazine conducted a survey recently which showed that already 94% of the world’s largest 1000 companies are experiencing problems in their supply chains because of the coronavirus epidemic. The effects of the economic slowdown is potentially devastating for countries of the Global South that make up an integral part of the global supply chain. Already, commodity prices for products such as oil, steel, natural gas, and pork, among others, have all plummeted.
As a result, unless the pandemic is overcome very quickly, countries in the Global South will face problems in what is known as their balance of payments. That is their ability to pay for badly needed imports with the income that they receive from goods that they export. Is there anything that can be done on an international level to help countries deal with this crisis?
Joining me now to discuss this question is Andrés Arauz. He is a senior research fellow at the Center for Economic and Policy Research and he is a former minister of knowledge and a former Central Bank general director of Ecuador. He joins us today from Mexico City. Thanks for being here again, Andrés.
Andrés Arauz: Hi, Greg. It’s a pleasure to be here and to talk about this.
Greg Wilpert: Before we get into what can be done about the impending global economic crisis, let’s take a closer look at what this crisis means for countries of the Global South. I mentioned that countries would have balance of payments problems. What would this mean for the lives of ordinary people in the countries of South America or Africa, for example?
Andrés Arauz: Like you mentioned, the balance of payments problems create a macroeconomic problem because most currencies of the Global South will have to depreciate or lose their value. That immediately impacts the populations of the Global South in terms of the purchasing power of their citizens. That’s the quickest way the macro problem will hurt them. But then the pandemia itself will imply very difficult times for the populations of the Global South in terms of the preparedness of their national health systems to deal with this.
There’s also an interrelation there between the preparedness of the health system and the balance of payments because many times the domestic economies of the Global South are not prepared in terms of their production and supply chains for the materials, the equipment, the capital goods, the beds, even basic hospital equipment that will surge in the short term and that is not produced locally, so that will imply imports.
Of course, with these same needs occurring at the same time all over the planet that will imply that they will either be very expensive or not accessible at all. That will impair the ability of national governments in the Global South to reply to the pandemic itself. Many other countries around the world also have a chronic lack of food sovereignty or food security.
Because there is now pressure to keep domestic resources within domestic economies, we’ve seen export restrictions. For example, from the European Union on medical equipment and soon to be probably even food items. This will also impact heavily those food insecure countries in the Global South. The situation can rapidly become a humanitarian crisis if society at large, and by this I mean the entire human species, doesn’t take into account the needs and the urgencies of the Global South.
Greg Wilpert: What can be done about this problem on a macroeconomic level? What can international financial institutions, for example, do to address this impending crisis?
Andrés Arauz: It’s very important to first have all the macroeconomic issues not be an actual issue right now. All the energy right now has to go into solving real-world food and the health issues and not balance of payments issues or lack of money. As we’ve seen in the first world and the center, we’ve seen politicians and central bankers saying, “We’ll do whatever it takes. We’ll print as much money as necessary so that the monetary dimension is not a problem when dealing with this global pandemic.”
That has to also be applied for the Global South. The difference is if you have a central banker from a central African country say, “We’re going to print as much money as necessary,” that will immediately create a devaluation of their currency, the balance of payments and macroeconomic issues that we all know about. That’s why we need the whatever-it-takes statement to come from international financial institutions.
In this case, it would be specifically the International Monetary Fund, not by saying, “We can lend you in exchange for conditionality and reducing size of your public sector,” when that’s absolutely not what is needed right now, but by issuing, what are called, special drawing rights, which is a global currency that the IMF issues out of thin air and have that money be available to all of the countries, central banks so that they don’t have those payments restrictions for international trade and so that the domestic macroeconomic problems are not added onto the already critical situation regarding the pandemia and the global health and food issues.
Greg Wilpert: Can you explain a little bit more about how these special drawing rights, the SDRs, as they’re known, how that works? Is it something that they can then use for imports? Do other countries or companies, businesses accept them? How would that work?
Andrés Arauz: This is a global currency that’s only used by central banks. It’s issued by the International Monetary Fund. It was created in the late ’60s and likely used in the early ’70s, but during a long time it was forgotten. It was parked on the Central Bank’s balance sheets and everybody ignored them. However, in 2008 and 2009 the United Nations General Assembly called on the International Monetary Fund to issue again these special drawing rights so they could be used for countries that were in balance of payments crisis. The IMF did so after a [inaudible 00:07:35] by the G20.
In summer of 2009, the IMF issued $187 billion worth of these SDRs that was around $250 billion at the time. It was allocated or distributed to all of the countries in the world. Of course, because the distribution mimics the IMF voting power, most of them went to the rich countries that didn’t use them at all. They just left them unused in the balance sheets. The poorer countries, for example, African countries, like the Democratic Republic of Congo, like Gambia, like Tajikistan, and even Ecuador, I was at the Central Bank at the time, we received around a $400 million worth of these SDRs.
We cashed those SDRs immediately, got dollars for them and used them to pay for imports. Companies and citizens don’t accept SDRs. They are only a currency to be used among central banks. But this is precisely the situation that we are facing now because most of the humanitarian and emergency trade that we’ll be seeing in the next few days will be interstates trade. They will be state- owned everything right now. It is reasonable to use SDRs to pay for international trade for settling even some certainly international debts related to [inaudible 00:09:06].
Greg Wilpert: Before I get into whether or not this is being considered, I wanted to ask another question that’s related. During the Great Recession of 2008, a lot of financial liquidity was created when central banks pumped extra cash into the global economy. Much of that money ended up in various forms in countries of the Global South, which is now leaving those countries. Talk a little bit about how this action and how the, so to speak, after effects of 2009 are effecting the economies of the Global South now.
Andrés Arauz: I will divide that question into two. First, how does that money… those quantitative [inaudible 00:09:52] and those whatever-it-takes moments from a decade ago, how’d that money reach the countries of the Global South? For that it’s very important to understand that a special channel, or a special road, or a special highway was set up between the US Federal Reserve and special certain countries that had access to, what are called, the foreign exchange swap lines, which allowed certain countries to have access to US dollars in exchange for giving local currency to the US fed.
Of course, the US fed wasn’t going to do anything with those local currencies, but it was a global bail out of certain countries in the Global South and typical US allies in the Northern Hemisphere. That path that was set up allowed for global investments or capital flows to go to those countries, but it wasn’t a generalized phenomenon. It wasn’t like the stock markets in Mauritania or in Bolivia also received those in flows. It was the most financialized, emerging markets that received those in flows.
What’s happening now is that after a buoyant decade of capital flows that have achieved those emerging markets, when there is a panic they withdraw immediately and go back from the periphery back to the center. That’s what we’ve seen. Over $80 billion worth of capital [inaudible 00:11:31] in only a few day, as reported by the [International Financial Institute 00:11:34].
This is very critical because it is four times larger than what we saw in the initial phase of the 2008 crisis when capital flew back from the third world countries to the core countries and the rich countries of the world. There is a grave situation there. That’s why we also need the SDRs so that these capital withdrawals do not become another issue in the minds of policymakers that already have to deal with on-the-ground, real life issues.
Greg Wilpert: I think that’s an interesting point. That makes the situation even more difficult on top of the problem of collapsing supply chains. Have you seen any kind of reaction or anybody picking up the ideas, particularly people in power, who might be able to implement this idea of issuing SDRs to countries of the South?
Andrés Arauz: Yeah, definitely. After the article was published there have been sequels published already two or more times in the Financial Times. There was an article this week and another one just today by Gallagher and Ocampo. Ocampo especially is a interesting character there because he is part of several UN-based commissions. He was also part of the [Stiglitz Commission 00:00:13:17] in 2009 that also pushed for the issuance of SDRs that year.
He is based in New York and he has the possibility to influence decision makers around the world. I have information also that in the IMF the situation is starting to be discussed, because this is the only universal mechanism of liquidity provision. Swap lines are, like I said, the few chosen ones that have access to the US fed swap lines. But not all of the countries in the world. They’re over almost 200 countries and only about 10% will have access to the fed.
We need this mechanism for the rest of the world and we hope that that happens as soon as possible in very large dimensions. This is not a time for small issuance of a few billion dollars. We need, like I mentioned in the article, $3 trillion that will set up a large enough number that will stave off speculators hedging against the domestic currencies that will give policymakers enough room to pay for these humanitarian-based imports. It has to be a huge issuance. This is not only about satisfying the financial markets.
Greg Wilpert: It would, of course, boost the global economy. We’re going to have to leave it there for now. I was speaking to Andrés Arauz, Senior Research Fellow at the Center for Economic and Policy Research. Thanks again, Andrés, for having joined us today.
Andrés Arauz: Thank you, Greg. Bye bye.
Greg Wilpert: And thank you for joining The Real News Network.
Production: Genevieve Montinar, Bababtunde Ogunfolaju
Studio: Bababtunde Ogunfolaju
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