Debtors' Prison: The Politics of Austerity Versus Possibility

Debtors' Prison: The Politics of Austerity Versus Possibility Review

One of our foremost economic thinkers challenges a cherished tenet of today’s financial orthodoxy: that spending less, refusing to forgive debt, and shrinking government—“austerity”—is the solution to a persisting economic crisis like ours or Europe’s, now in its fifth year.

Since the collapse of September 2008, the conversation about economic recovery has centered on the question of debt: whether we have too much of it, whose debt to forgive, and how to cut the deficit. These questions dominated the sound bites of the 2012 U.S. presidential election, the fiscal-cliff debates, and the perverse policies of the European Union.

Robert Kuttner makes the most powerful argument to date that these are the wrong questions and that austerity is the wrong answer. Blending economics with historical contrasts of effective debt relief and punitive debt enforcement, he makes clear that universal belt-tightening, as a prescription for recession, defies economic logic. And while the public debt gets most of the attention, it is private debts that crashed the economy and are sandbagging the recovery—mortgages, student loans, consumer borrowing to make up for lagging wages, speculative shortfalls incurred by banks. As Kuttner observes, corporations get to use bankruptcy to walk away from debts. Homeowners and small nations don’t. Thus, we need more public borrowing and investment to revive a depressed economy, and more forgiveness and reform of the overhang of past debts.

In making his case, Kuttner uncovers the double standards in the politics of debt, from Robinson Crusoe author Daniel Defoe’s campaign for debt forgiveness in the seventeenth century to the two world wars and Bretton Woods. Just as debtors’ prisons once prevented individuals from surmounting their debts and resuming productive life, austerity measures shackle, rather than restore, economic growth—as the weight of past debt crushes the economy’s future potential. Above all, Kuttner shows how austerity serves only the interest of creditors—the very bankers and financial elites whose actions precipitated the collapse. Lucid, authoritative, provocative—a book that will shape the economic conversation and the search for new solutions.  

Title:Debtors' Prison: The Politics of Austerity Versus Possibility
Edition Language:English

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    Debtors' Prison: The Politics of Austerity Versus Possibility Reviews

  • Clifford

    Very readable and interesting. I was especially interested in the criticism of the IMF/World Bank response to the Asian Financial Crisis of the 1990s. Kuttner praises Joe Stiglitz but fails to note th...

  • Miles

    Since well before the 2008 financial crisis, the practice of economic austerity has beleaguered American and European politics. Praised by the right as a panacea of renewed financial responsibility, a...

  • Caren

    This excellent book is an exploration of the current economic idea that national debt reduction and austerity will help us find our way out of our ongoing economic malaise. The book is meaty, looking ...

  • Scott

    In Malaysia, another small nation that had suffered the effects of currency speculation, Prime Minister Mahathir Mohamad rejected the advice of IMF and resorted to direct capital controls. This was ri...

  • Venky

    A much needed work to demonstrate the dangerous consequences of some ill-conceived economic policies that are being formulated, nay foisted upon the helpless and the affected across the world under th...

  • Edwin Jain

    Got the book through First Reads. Robert Kuttner's "Debtors' Prison" was a great eye-opener about austerity and why it doesn't work. Thousands are taking to the streets now in Europe, Brazil, and Egyp...

  • Mlg

    Kuttner's explanation of the financial crisis of '08 is something most people understand. His book delves deeper into historic situations and the European Union's debt crisis (particularly in Greece)...

  • Andrew Lord

    Great beginning and ending, and one that properly illustrates the downsides and limitations of austerity and the follies of the "cut ______ government program to the bone" kick that so many politician...

  • LSC-University Park SLRC

    Read this book through Lone Star College's EBSCO Ebook Collection....

  • Kathy Hughes

    Excellent book which offers concrete, workable solutions to our current economic problems. Unfortunately, with the exception of Senators Sherrod Brown, Elizabrth Warren, and Bernie Sanders, not many i...