In Buying Time, I treat the global financial and fiscal crisis of 2008 not as a freestanding individual event, but as a part of, and tentatively also a stage in, a historical sequence. I distinguish three phases: the inflation of the 1970s, the beginning of public indebtedness in the following decade, and the increasing debt of both private households and businesses, in both the financial and the industrial sector, since the mid-1990s. Common to these three phases is that each of them ended in a crisis whose solution was at the same time the starting point of a new crisis. In the early 1980s, when the central bank of the United States ended inflation worldwide by a sharp rise in interest rates, public debt rose, more or less as a balance to this; and when this was redressed in a first wave of consolidation in the mid-1990s, private household debt rose, like a system of communicating vessels, and the financial sector expanded with unprecedented dynamism, until it had to be rescued by states in 2008 at the expense of their citizens.

[...] three processes running in parallel and mutually interlocked (a ‘triple helix’, if you like): the sequence of economic crises of inflation, public debt and private debt (today followed by dramatically expanding balance sheets of central banks, and a corresponding expansion of the money supply); the political-fiscal development from tax state to debt state to consolidation state; and a progressive shifting of the arenas of class conflict ‘upwards’, from labour market to welfare state to capital markets (and from here to the arcane sphere of central banks, financial-diplomatic summit conferences and international organizations).

[...] Buying Time treats state debt as a phenomenon of political economy: not merely one of democracy but also one of capitalism. Capitalism is about the expansion of expandable capital in the form of private property; this entails the danger of a withdrawal of cooperation by those who are needed for accumulation but will not own what is accumulated. Since capitalism is not a state of nature, it can only exist on the basis of reciprocity in some form or other; if this is not present, the question then unavoidably arises as to why one kind of people should work forty and more hours a week for the enrichment of the other kind. This implies that problems of justice and distributional fairness in capitalism are not the discovery of irresponsible political troublemakers, but lie in the nature of a capitalist social order itself. They are mastered to some extent as long as high growth makes it easier for the owners of capital to cede a part of the collectively produced increase to the non-owners. When growth declines, as after the end of the reconstruction phase in the 1970s, distributional conflict sharpens, and it becomes correspondingly more difficult for governments to secure social peace. [...]

[...] Until now, of course, longer-term growth rates have been falling together with peak tax rates, and so has the average tax take of rich democracies. Worse still, in parallel with the declining taxability of firms, their claims for national and regional infrastructure have become more demanding; firms ask for tax reductions and tax concessions, but also and at the same time for better roads, airports, schools, universities, research funding, etc. The result is a tendency for taxation of small and medium incomes to rise, for example by way of higher consumption taxes and social security contributions, resulting in an ever more regressive tax system.

[...] not even the greatest optimists claim that enough has been done to make the financial industry safe for society, while there are quite a few voices, both insiders and outsiders, that insist that whatever change there may have been is not sufficient to protect the global economy from another financial crisis of the 2008 sort. Calls for more radical reform are widely heard, even from the likes of Christine Lagarde and Wolfgang Schäuble. For example, speaking at the meeting of the G20 finance ministers and central bank presidents in Shanghai in February 2016, Schäuble, according to newspaper reports, ‘warned against a delay in financial market reform. “This would be a terrible mistake”, he said. “We must continue reforming the financial markets.”’ The article mentioned that ‘demands for easing up on reform had been heard after bank stock prices had come under pressure globally'.

[...] the notion of a ‘savings glut’, put forward in 2004 by Ben Bernanke when he was still chair of the Federal Reserve. In a savings glut, desired saving exceeds desired investment, making for an overabundance of capital for which there is no use. Why something like this should have come about remains in dispute. An interesting theory claims that excess capital is due to both technological and demographic causes taking effect simultaneously: technological, as today’s advanced methods of production require less and less lumpy physical capital, and demographic, as people live longer and therefore must save more for their old age. While technological change lowers the demand for capital, demographic change increases its supply. Low or even negative interest rates are therefore primarily reflections of market conditions, not the result of central bank monetary policies – the latter essentially just follow and mirror the former. The practical implication is that in order to revive growth, governments should rely on fiscal rather than monetary stimulus, absorbing the surplus capital by borrowing – which is so cheap in a ‘savings glut’ that borrowing practically pays for itself. Growth and employment are then brought back by substituting public for private demand.

In the last analysis, the euro and its crisis should not be treated, or at least not primarily, as a problem of European unity, but rather as a subtheme of the pressing question of a functional monetary order for the capitalism, perhaps the post-capitalism, of the twenty-first century. Since the end of Bretton Woods, there is no longer agreement in the capitalist world as to how such a monetary system would look, one that would do justice to the interests and capacities of the highly different countries now participating in the global economy. The crisis-prone nature of present-day financialized capitalism arises not least from this circumstance. Among the necessary subjects of the global monetary reform that should long have been on the agenda is not only the present, completely inadequate exchange-rate regime, but also the replacement of the dollar as reserve currency, the global regulation of money and credit creation, and oversight not only of the banks, but also of hedge funds and other firms in the overblown financial sector. [...]