The debt problem and the new phase of the global crisis

This article deals with the phases and problems in the crisis of transition from“Fordism” to a new order and a new growth model for the world economy. The two differentresponses to the productivity fall problems – radical reduction of labor costs or a new socialcontract – are pointed as determinants of the crisis evolution and, in special, of the developmentof the American commercial deficit and Treasury debt, and the third world debt. It isshown that the solution by debt payment is not viable and that macroeconomic logic leadsto devaluation as an adequate response. Ethical, political, and technical problems of thisscheme are analised indicating that more probably the debt devaluation will be combinedwith a readjustment of the export flux of the United States and the Third World againstEurope and Japan. Finally, the possibilities of a significant European contribution to thisreadjustment are discussed. It is argued that, for this to occur, a common social policy forEurope must be adopted before the 1992 unification. JEL Classification: F50; F55; P10.