Prof. Steve Keen has grasped the global debt picture and come up with the most sensible proposals yet for downsizing the global casino and taming finance , so as to return it to its original limited purpose . We at Ethical Markets Media (USA and Brazil) also support a financial transactions tax , as a simple and equally systemic reform to complement those advocated by Keen in this paper, posted with permission of the author. Hazel Henderson, Editor
The fundamental cause of the economic and financial crisis that began in late 2007 was lending by
the finance sector that primarily financed speculation rather than investment. The private debt
bubble this caused is unprecedented, probably in human history and certainly in the last century
(see Figure 1). Its unwinding now is the primary cause of the sustained slump in economic growth.
The recent growth in sovereign debt is a symptom of this underlying crisis, not the cause, and the
current political obsession with reducing sovereign debt will exacerbate the root problem of private sector deleveraging.