Bless the Borrowers — ‘Debtors’ Prison,’ by Robert Kuttner

Robert Kuttner’s title refers, first, to the “medieval institution” that was the fate of improvident souls in England who could not repay their debts, including Daniel Defoe. In 1692, Defoe was committed to King’s Bench Prison in London, where he began to agitate for a change in the legal system. Forcing debtors to rot, Defoe not disinterestedly pointed out, was injurious to both parties, since “after a debtor was confined in prison both he and the creditor lost through his prolonged distress.” Society responded, eventually, with bankruptcy laws, but it is very much Kuttner’s point in “Debtors’ Prison” that we — America and Europe in the age of the financial crisis — have yet to absorb the principal lesson of Defoe’s “bitter experience.”

The contemporary prison Kuttner has in mind is the policies and practices of central banks, governments, international finance agencies and Wall Street that add up to a state of nonforgiveness. The debtors he would like to spring from their figurative King’s Bench include Americans with underwater mortgages, sovereign realms like Greece, overborrowed college students and just about any institution (save for big banks) with a marker coming due.
 

As his subtitle makes clear, Kuttner’s crusade is not just for debt forgiveness but for budgetary largess as well. Enforcing austerity on bankrupt states has become routine, our financial penicillin. Kuttner says the pill is just as self-­defeating as tossing debtors in jail. He is angry at Barack Obama for embracing what he terms austerity, the president’s formerly trillion-dollar deficits notwithstanding, and for not providing large-scale mortgage relief à la Franklin Roosevelt. While his complaints echo those of others on the left, Kuttner’s thesis is girded to a historical narrative that yields a coherent, readable and highly impassioned book.

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Read more about the book: Debtors' Prison: The Politics of Austerity Versus Possibility