Debt

The similarity of the debt problem, the revolts, social movements, and pending default have all tempted comparisons between Greece today and Argentina’s crisis and popular uprising at the turn of this century. In December 2001 media and activist attention centred on Argentina like it does on Greece today for more or less the same reasons.

Conflicting figures and competing forecasts for Britain make confusing reading for anyone trying to make sense of what is going on in the economy.

In early autumn 2013 chancellor George Osborne was trumpeting economic recovery, but between October and November 2013 there was a sudden slump of output in construction, and manufacturing flatlined.

By January the International Monetary Fund (IMF) was making optimistic predictions about the British economy, and the coalition is crowing over the rise in employment.

Twice last summer robbers made off with the cash boxes containing a few tens of thousands each from local banks. But who were the bigger thieves - the robbers or the branches of the banks whose cash was stolen? I have no romantic illusions about people who rob banks. But thinking about how the banks themselves have robbed us at a branch level is an interesting exercise.

When dodgy dealing and debt shook the global financial system in 2008 most attention was focused on what is called investment banking. Investment banks have two jobs.

At the centre of all the press talk of a capitalist crisis (and this is the phrase increasingly used by papers such as the Financial Times) lies a crisis of the eurozone - the EU economy is bigger than that of the US.

To explain why this happened, it's useful to begin by looking the peculiarities of the US political system. The US does not have a parliamentary system where the parliament elects the government. Instead, a president is elected every four years. There are elections every two years for Congress - the House of Representatives and the Senate.

GREECE: CRUCIBLE OF RESISTANCE

Greek workers show the way

Two recent events, unequal in magnitude, represent epochal changes to the global economy. The first was the brief war between Georgia and Russia in early August 2008. This was followed by the second: the collapse of Lehman Brothers in September of the same year, which precipitated the biggest financial crash since the Great Depression of the 1930s.

•$35 billion Approximate equivalent in today's currency of Haiti's bill to France for its "lost" colony

•$750 million Haiti's debt in 1986, when the US-backed Duvaliers fell

•$900 million The Duvalier fortune that remains frozen in a Swiss bank

•$321 million The cost of servicing Haiti's debt between 1995 and 2001

•$11 million The amount by which interest on debt exceeded foreign aid to Haiti in a single year (2003)

•$1.9 billion Haiti's debt when the US gave $1.2 billion in relief (June 2009)

That was nothing. Last month has brought new surprises at the amount of wealth in the system and how prepared governments are to use it to bail out the rich and powerful.

The whole scale of it takes your breath away. Banks lent money they didn't have to people who couldn't pay it back and then packaged these debts as prettily as they could and sold them on in such a way that no one really knew where they were. When this game of pass the parcel stopped, everyone panicked and refused to lend to one another.

Heaven knows it's hard to be upset about merchant bankers losing their jobs, but the so-called "credit crunch" has now turned into a much more serious crisis of the banking system as a whole. Given the banks' centrality to capitalism's market economy, a serious recession is now very much on the cards. Massive exposure to the tottering pyramid of debt associated with the "subprime" mortgage market and other scams means that the banks have pretty much stopped lending to each other and other businesses.