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In this video Paul Jay interviews Kevin Gallagher who is a professor at Boston University, a research fellow at the Global Development and Environment Institute, and also associated with Tufts University.
This subject is quite complicated and is not easily covered in 18 minutes. Also, Professor Gallagher discusses the subject in rather abstract academic terms, and always within the context of the reigning capitalist system. However, the subject deals with urgent contemporary issues and needs to be understood by working people.
The picture that the professor paints of the sovereign debt crisis suggests to me that the capitalist elites, who are the bondholders, have structured in all kinds of laws and mechanisms to prevent any kind of democratic response or solution to the problems by working within the system.
Instead of paying taxes--and they don't pay much--the ruling class prefers lending money to the government in form of bonds and treasury bills. According to Bloomberg News, this ruling class of bondholders are making sure that their loans be paid back and that their bonds have priority over Social Security recipients, military personnel, welfare recipients, and unemployed.