https://consciousnessofsheep.co.uk/2025/10/26/debt-slavery/ Speculation about the UK having to take out an IMF loan was hyperbole. While it is true that the UK is a long way along the road to collapse, it is not there yet. And the much touted bond crisis turned out to be a damp squib – for now, UK government debt is regarded as safer than the mountain of dodgy debt in the shadow banking system. As in 1976 – when the UK government really did take out an IMF loan – the purpose is political.
In 1976, the Labour government lacked a majority in parliament, relying on the support of the Liberal Party to pass its legislation. And following several years of eye-watering inflation stemming from the oil shocks earlier in the decade, a still strong trade union movement was pushing for pay rises. This fed into the discontent on the left of the Labour Party, which sought more nationalisation and state control as the solution to the problems. The IMF loan was not taken out to fill a hole in the public finances – most of the loan remained unspent when Thatcher took over in 1979 – but a means of tying the government’s hands to a monetarist policy while seeing off any challenge from the left.
Speculation about an IMF loan in 2025 emanated from sources close to the prime minister, and were no doubt intended for the same purpose. After being forced by their own backbench MPs to U-turn on cuts to the pensioners’ winter fuel allowance and cuts to disability benefits, the government understands that it will struggle to make further cuts to public spending. Moreover, imposing new taxes on already over-taxed businesses and households will not be welcomed by MPs who can already see defeat looming at the next election. And so, the threat of the monetarist discipline that accompanies IMF loans, was put out in a desperate attempt to head off any further backbench rebellions.
It won’t work, of course. Everyone involved knows that the career of any prime minister who took out such a loan would be over. And the party which did so would be out of office for a generation. And so, while the government may hope the threat will mute future rebellions, and while the opposition can score a few open goals over the government’s financial incompetence, the UK state is on the same trajectory as I outlined in the summer:
“Since spending cuts cannot fill the gap, we can be certain that taxes will be increasing in November’s Budget. The only questions to be resolved are whether the government will ditch the promise not to raise Income Tax, and whether they will appease their backbench MPs by increasing taxes on the rich. As with spending cuts, however, we are already too far along the Laffer Curve for increased taxes to result in anything close to the hoped-for increases in government revenues. For thousands of British businesses which are struggling to survive, more taxes are likely to be the final straw that drives them to insolvency… the ensuing unemployment payments costing more than the taxes were designed to bring in.
“So, with economic growth a distant memory, with spending cuts far easier in theory than can ever be achieved in practice, and with tax increases more likely to ruin what remains of the economy than to fill the gaps in the government’s finances, there is just one thing left to the government to do. No longer having the revenues from North Sea oil and gas, and having flogged off the public assets decades ago, the UK government is going to commit monetary seppuku – it is going to turn to currency creation…”
The process is grindingly predictable since there is no alternative within the neoliberal system. Why? Because at its core, the neoliberal system is a system of debt slavery. Anyone in the bottom half of the income distribution can understand viscerally how pernicious debt can be. At best, we will have experienced times when we have had to rely on the generosity of friends and family to get by. At worse, we can find ourselves trapped in a downward spiral of overdraft, credit card, and even loan shark debt… each new “consolidation” making the debt ever harder to repay.
Whether Thatcher understood this or not, the monetarists behind her so-called “property-owning democracy” certainly did. The fire sale of Britain’s public housing stock may initially have resulted in increased support for the Tory Party. But with the creation of a housing market where prices reflect the amount of money the banks will let people borrow rather than the intrinsic value of a house, within a generation, debt slavery became the default… for millions of people making the monthly mortgage payment became their de facto life’s purpose. And renting in the private sector was no better, since the aim was to save enough for a mortgage deposit.
Moving away from the cash payment of wages to bank transfers, deregulating banking and finance, and widening access to credit, all served to normalise debt while further ensnaring the population. The need to make the repayments – and to keep a clean credit score – drove us to put up with bullshit jobs and falling real incomes, because failure, bankruptcy and homelessness loomed for those who couldn’t. The introduction of student debt in the 1990s extended this, forcing our brightest young people into unproductive sectors like banking and finance or management consultancy, as the only places paying enough to pay down the debt and save the deposit for a mortgage.
That was only one side of neoliberal debt though. Corporate debt was even more malicious. The post-war boom had witnessed a “managerial revolution” in which the day-to-day managers of corporations challenged the power of the owners… particularly where ownership was distributed among shareholders. This resulted in investment in activities such as research and development, which were at odds with short-term returns to shareholders. This was anathema to the neoliberals, who insisted that generating narrowly defined “shareholder value” was the sole purpose of private businesses. But since the ordinary debt of shareholding was insufficient to discipline corporate managers, an alternative form of indebtedness was needed.
Glazerfication – the manner in which the Glazer brothers bought the Manchester United soccer club – was at the heart of the neoliberal revolution. Just as we mortals ended up serving our monthly mortgage or rent payments, so managers had to hand control to the monthly debt repayments. Those managers who failed to meet the challenge would be “let go” – with all of the economic downside that those two words imply. Corporations were routinely downsized, with anything not serving shareholder value either closed, sold-off or outsourced. All that remained were flows of currency from customers into the pockets of shareholders and debt issuers… and the increasing enshittification that this implies.
Government – at least in the west – was a harder nut to crack. Neoliberal IMF discipline could be imposed on developing states through forced privatisations and cuts to welfare programs. But sovereign western states could, within tolerances, print any currency they needed to make up any budget shortfalls. Government borrowing was simply a convention designed to provide a safe savings vehicle to businesses and households and a safe form of collateral for investors. And so began neoliberalism’s assault on the very heart of democracy.
The energy-based crisis of the 1970s had been mis-sold as a monetary crisis. The big lie was that the inflation was caused by profligate politicians printing too much currency. The reality was that a big, and partly permanent, rise in the energy cost of energy translated into a rise in the energy cost of everything… and monetary prices had to rise accordingly. Not that the politicians of the period would have known this. And the media and the wider public certainly didn’t. And so, the myth of profligate politicians took hold. And as with managers, debt would be the mechanism employed to bring the politicians into line.
In the 1950s, banks based in the City of London had invented the Eurodollar system, which allowed “offshore banks” to create dollar-based debt out of thin air. To this day, western central banks peddle the myth that the Eurodollar system doesn’t exist, and that all of the currency in circulation is regulated by one or other central bank, and thus ultimately overseen by democratically elected government. The reality is that tens of trillions of debt-based dollars are generated outside of the control of the central banks. Indeed, the key feature of the 1986 “big bang” banking and finance deregulation was that it took the international banks’ ability to generate unregulated currency and handed it to domestic banks as well – a theoretical central bank licence providing the fig leaf to cover the excesses which were finally exposed in 2008.
The biggest neoliberal trick of all, however, was to persuade western governments to hand control of their currencies to the banks. This was achieved by handing monetary policy to sub-committees of the central banks and by convincing the political class that this arrangement was the natural order of things. In this way, government itself became subject to the same neoliberal debt slavery that had been imposed on corporate management and individual debt-serfs. “Balancing the books” and “bringing down the deficit” became more important than the wellbeing of citizens or even the defence of the realm. Even the health of corporations and businesses was only of concern insofar as the taxes they pay can be used to pay down the government’s debt.
The high point of this debt slavery came in October 2022, when a threatened government debt crisis by:
“… an unholy coalition of IMF, Bank of England and Government technocrats, aided and abetted by establishment media editors and disgruntled failed politicians, force[d] a sitting Prime Minister and Chancellor to reverse their economic policy. In a democracy, that role is supposed to rest with the electorate.”
Government debt had become as powerful as a colour revolution in overthrowing elected governments… and will continue to be so as long as we collectively continue to treat the debt-based currency system as the only option on the table. The coming crash – likely triggered by the bursting of the AI bubble – which will see the imploding of the more than $65 trillion debt in the “shadow banking” sector, will challenge this though, because this time around, even governments lack the ability to bail out the system.
Two embryonic alternatives have been trying to gain traction for decades. Both currently contain flaws but might be developed as an alternative to an increasingly discredited neoliberal system. First, digital currencies, while failing as a replacement for money in domestic economies, might provide precisely the distributed ledger that would prevent much of the grift and secrecy within the current Eurodollar system of international exchange. Second, the core proposition of Modern Monetary Theory – that sovereign governments can, and ought to, issue their own currencies is the only means by which citizens can wrestle back control over government from the neoliberal money men. In 2008 and again in 2020, governments created billions of dollars, euros and pounds in service of the money men. There is no reason why they could not do the same for the people… beyond the political class’s cowardice.
It goes without saying that it will take a systemic crisis even to get such ideas onto the political agenda. There again, a systemic crisis… or rather, a whole host of systemic crises, is precisely what is looming over us. And as a wise man once said, “until you solve the problem of debt-based money, you solve nothing.”The last working-class hero in England. Clio the cat, ? July 1997 - 1 May 2016 Kira the cat, ? ? 2010 - 3 August 2018 Jasper the Ruffian cat ??? - 4 November 2021 Georgina the cat ???-4 December 2025
Re: Debt slavery
Posted by Gerard on October 28, 2025, 8:59 am, in reply to "Debt slavery"
"Government debt had become as powerful as a colour revolution in overthrowing elected governments… and will continue to be so as long as we collectively continue to treat the debt-based currency system as the only option on the table. The coming crash – likely triggered by the bursting of the AI bubble – which will see the imploding of the more than $65 trillion debt in the “shadow banking” sector, will challenge this though, because this time around, even governments lack the ability to bail out the system.
Two embryonic alternatives have been trying to gain traction for decades. Both currently contain flaws but might be developed as an alternative to an increasingly discredited neoliberal system. First, digital currencies, while failing as a replacement for money in domestic economies, might provide precisely the distributed ledger that would prevent much of the grift and secrecy within the current Eurodollar system of international exchange. Second, the core proposition of Modern Monetary Theory – that sovereign governments can, and ought to, issue their own currencies is the only means by which citizens can wrestle back control over government from the neoliberal money men. In 2008 and again in 2020, governments created billions of dollars, euros and pounds in service of the money men. There is no reason why they could not do the same for the people… beyond the political class’s cowardice.
It goes without saying that it will take a systemic crisis even to get such ideas onto the political agenda. There again, a systemic crisis… or rather, a whole host of systemic crises, is precisely what is looming over us. And as a wise man once said, “until you solve the problem of debt-based money, you solve nothing.”"
There's a lot wrong with this article..not least of which is the notion that these "shop window" institutions actually control the money supply and the debt bubbles (one big one in reality)...and are not simply fronts for the NWO globalists..their figures mean next to nothing..as do our chancellor's who "listeth where she will" on the trade winds..The only way to address our parlous situation is to directly confront the Libor (& related) crisis..Britain is a "key-log" they know it but apparently the mass of the population does not..screw AI both it and the WiFi economy that enables it are utterly false..the crash when it comes this time will be existential...and will effect all plains...
Re: Debt slavery
Posted by Keith-264 on October 28, 2025, 12:16 pm, in reply to "Re: Debt slavery"
I like your "shop window" idea. I'm not sure what key-log means though. The last working-class hero in England. Clio the cat, ? July 1997 - 1 May 2016 Kira the cat, ? ? 2010 - 3 August 2018 Jasper the Ruffian cat ??? - 4 November 2021 Georgina the cat ???-4 December 2025
Re: Debt slavery
Posted by Gerard on October 28, 2025, 3:22 pm, in reply to "Re: Debt slavery"
As in lumberjacking....remove the key-log and the river flows; "Key-logs and dependencies" an Herbertian meme from "Dune"
Re: Debt slavery
Posted by Keith-264 on October 28, 2025, 4:36 pm, in reply to "Re: Debt slavery"
Ah, thanks....The last working-class hero in England. Clio the cat, ? July 1997 - 1 May 2016 Kira the cat, ? ? 2010 - 3 August 2018 Jasper the Ruffian cat ??? - 4 November 2021 Georgina the cat ???-4 December 2025
on October 27, 2025, 6:47 pm