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LaRouche: The Debt Must
Suffer, Not the Debtors

Aug. 24, 2002 (EIRNS)—Speaking to a large conference in Guadalajara, Mexico, Lyndon LaRouche answered a question on the "problem of unpaid debt" throughout South America, comparing the gravity of the crisis to that of the 14th Century, which produced a dark age.

"We have to understand that the entire, present world monetary-financial system, as a system, is bankrupt," the Presidential candidate insisted. "We must understand that the financial systems of Europe are bankrupt; that the financial systems and leading banks of the United States are bankrupt; that the United States would be bankrupt, if it were not a nation-state with special constitutional authorities, which only a republic has. The Americas are bankrupt. But the world as a whole, with a few, spotty exceptions here or there, is all, in all parts, financial bankrupt. Japan is bankrupt. And so forth and so on.

"Therefore, what we have to do in a situation like this: There is no simple, mechanical reform, which in the framework of the present monetary-financial system, will work.

"I'll give an example of what I mean by that: In middle period of the 14th Century in Europe, all of Europe had been looted by a financial system, called the Lombard bankers, a syndicate, typified by the House of Bardi and Peruzzi. These bankers had engaged in "loan-sharking" (as we would call it) throughout Europe. At a certain point, the King of England said, "We can no longer pay this debt"; and said the debt was usurious, and therefore, illegal, under Christian law. At that point, the whole system collapsed. Now, during that period, leading up to the collapse, and following it, the option was, either to write off the illegitimate, usurious debt, or to destroy the people of Europe. At that point, the debt-holders prevailed, politically. Europe was forced to submit to the collection of debts they could not pay. As a result of that, one-third of the population of Europe was destroyed, murdered in a period of about less than half a century.

"Today, we face a similar situation: We have the choice, now, of trying to collect on the outstanding debts, including the debts held against the nations of Central and South America, or we're going to see, as is clearly seen in the case of Argentina at this moment—and is threatened for Brazil; and is threatened throughout the region—we're going to see a holocaust of death, from economic and related causes, matching that that struck Europe in the 14th Century. No nation-state, presently existing, can survive, if it tries to keep paying this debt! It can't.

"So therefore, under law, which is essentially the law of Christian civilization, the principle of the common good—or called in Greek "agape"; or also called "the general welfare" principle, which is the distinction of modern European culture, a state based on the principle of the "general welfare," as the U.S. Constitution specifies: In such a condition, when paper debt threatens the lives and the general welfare, and the common good of people and of their nations, the debt must suffer, not the people!

"This debt was created artificially, by usury, which technically is morally unlawful, which is therefore, lawfully a crime. The present system, established under the floating-exchange-rate system is, under Christian law, is immoral. It's a crime against humanity, like mass murder. And, if continued, will result in mass murder. Therefore, sovereign governments, which consider themselves accountable to present generations, and their posterity, must act to put the debt into bankruptcy reorganization, in the same way we put an independent financial firm or corporation into bankruptcy reorganization.

"We must save the productive forces. We must protect the people. We must protect the sovereignty of the nation. And therefore, the debt will have to suffer, under those conditions. If we do not have the courage to do that, there is no hope for civilization, globally. Under the present conditions, of spreading old and new epidemics, there is no part of this planet, which could survive, under those kinds of conditions, which this bankruptcy requires; unless there's a reorganization of the financial system.

"That's what we must do. And that is the thing that tests the nerve of governments: Do they have the courage, to combine with other governments, to force this system to go through bankruptcy reorganization? Or will they sit back and watch the mass murder of their people, and the extinction of their nation, in the most horrible way?"

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