"The inflation of public indebtedness was an essential element for the enhanced power of financial capital. That inflation was a result of a conscious under-financing of the state and is a lever to enforce an austerity policy. Financialization intensified the pressure for the reorganization of working conditions and the precariousness of work and living conditions...
State indebtedness is a result of an under-financing of public budgets by lowering direct taxes on income and on the profits and capital for firms. The top tax rates for incomes and corporate profits were reduced all over Europe since the middle of the 1980s... The system of state financing involves a transfer of wealth from wage-earners to the banks and investment funds... The state debts are not a result of excessive state spending. Rather they are an integrated element of the financiers' regime and an expression of a structural under-financing of public budgets.
The tight budgets were an important lever for implementing a harsh austerity policy. They serve as a pretext for restraining the state from certain sectors of the economy and executing privatizations and a comprehensive reorganization or even destruction of the whole welfare system - at the expense of wage-earners and the expropriated population..."
to read Christian Zeller's article "Cancellation of Illegitimate Debts Instead of Bailout Umbrellas for Financiers" published in the summer of 2012, click on