Dear Mr. Draghi,
concerning your recent article in the Financial Times: We face a war against coronavirus and must mobilise accordingly (FT 25.3.2020), as it seems unclear who is currently running the show at the ECB, I might as well write to you.
Most of what you write in the article is true, the world has no other option than to see more public debt, and private sector debt cancellations (to start with) are in order – in practice a biblical Jubilee.
What you fail to address is why the core reason why private sector is so much trouble – look back at your own words on July 26th 2012:
“Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.”
What it took was to indebt everyone so badly, that the economy simply cannot pause even for a month without everyone and their mothers going belly up. If the businesses would own the buildings they operate in, and the social security would operate on a basic income model, everyone could just take a long holiday and all of this would be past us soon enough.
Instead, you, Bernanke and Greenspan well before you, have created a rentiers paradise, where the profits during the good times are private, but the losses during difficult times are socialized.
When this crisis is behind us, I urge the central bankers and the economists of the world to break this vicious cycle. Create an economic system where it is impossible to sacrifice the long term stability for short term goals with debt.
This means the interest rates must always remain on a high enough level to discourage excessive leverage. Even with high interest rates, it is possible to reach the targeted inflation level through citizen dividend (AA 22.3.2020).
The Liberal Party of Finland