The sky-high level of over-indebtedness in Sweden is not just a personal tragedy for hundreds of thousands of people – it is a systemic failure that reveals something deeply immoral in our economic system. In the fall of 2025, collection requirements will decrease slightly, but that is because people are too poor to even borrow.
Private debt mountain not necessary
We live in an economy where banks do not lend money they already have, but create it by entering numbers into a digital account. According to the Riksbank itself, the banks create most of all the money in society through credit – i.e. debt【1】. The state has voluntarily transferred this power to private banks instead of using its sovereign right to create debt-free money for the benefit of society. The Riksbank knows how efficient it is when the state creates money, but they are afraid that the state would create too much money and there would be inflation. But the concrete result when the state abolished the gold standard and introduced fiat currency in the 1930s was deflation and rapid economic recoveryThe result now that the banks create the money? We outsource our production to low-wage countries that risk out-competing us about the good jobs. At the same time, banks in Sweden profit from inflating private debt mountains. Anyone who ends up in over-indebtedness has to take the full brunt of it themselves.
Banks lend your labor to yourself
What are the banks actually lending? Not old savings – but your own future workforce. Your future performance, your effort, your life. And when you can no longer run on this hamster wheel, the bailiff is waiting. Then you are a system failure, a burden, an “individual problem”.
Fewer approved debt restructuring applications
The report from Arena Idé clearly shows: the number of approved applications for debt restructuring is falling, even though more people need help. Less than 8 percent of those over-indebted receive restructuring. The rules are rigid, the thresholds high, and the repayment period – five years at the subsistence minimum – is in itself a punishment that erodes both health, motivation and the possibility of rehabilitation. Denying faster debt restructuring in a country where banks make billions by creating money out of thin air is nothing more than institutionalized hypocrisy.
Obstacles to debt restructuring enrich banks
And while an ordinary person loses his life and health in the debt swamp, the banks continue to enrich themselves on society's silence. Instead, we could have a fair system, where the state – not the banks – creates money for the common good, where people receive debt relief based on real needs, and where equality, not greed, is the norm.
Helping the indebted would increase productivity and public health
A restructuring reform that shortens the repayment period, helps more people get help earlier, and strengthens incentives to work would not only be humane – it would also be economically rational. It would increase consumption, reduce ill health, and make society less vulnerable to recession. And above all, it would limit the banks' power to extract value from a workforce that is already spent.
Do we want a society where guilt is a life sentence – or a second chance at dignity?
Sources:
【1】The Riksbank about money supply and how money is created
I have a little trouble seeing the connection between bank money and outsourcing. According to Alfred Chandler, outsourcing was a result of companies having to turn to lenders for money when they had too much inventory in the 60s and 70s, and the lenders were only interested in getting the money back quickly with interest. So companies sold out to get cash.
But maybe you have another piece of the puzzle. If so, I'd be grateful for it.
A clear case of the "asset inflation" that bank money creates, however, is that what has already been produced becomes more and more expensive. For example, housing. Almost nothing new is built, people have to outbid each other on what already exists. And borrow money for this.
With government money, the state could direct these to new production, so that prices go down. Or whatever there is a majority for.
For banks to create money, someone has to be willing to lend. And who lends, if society is already secure, housing is cheap and public services are working? Not many. So to keep the banks' money flowing, there must be shortages – things people need but cannot afford right away: a home, education, health, a private car, consumption or investments.
This is where outsourcing comes in. When the state and municipalities outsource healthcare, schools, social care, IT systems and infrastructure to private companies instead of running them themselves, it becomes more expensive and often worse – which creates new needs and shortages. The same thing happens when industry moves production to low-wage countries: jobs become fewer and more insecure here at home, which increases economic stress and the need for private solutions.
Without outsourcing, production works so well that most people get what they need – directly through their work or through tax-financed welfare. This also reduces the need to borrow, and thus the banks' power over money creation.
So when the state no longer creates money itself, you have to somehow create demand for bank loans. This can be done through tax cuts, privatizations, housing shortages, weakened labor laws, high tuition fees – and outsourcing. All of these create the very lack of security and assets needed to keep the lending machine running.
This is system logic. The less the state does, the more the individual needs to borrow. And the more you borrow, the richer the banks become. Then it is not difficult to understand why the banks like privatizations and that the state “has to save”. It is they themselves who profit from it.
The state outsources to private companies for ideological reasons, not because it is short of money. This outsourcing often ends up being more expensive than when the state manages the business itself.
And private companies outsource abroad for various reasons. Either because production is cheaper there, or because the market is there, or (which I have not least wondered about) to quickly get money to pay their owners.
But I see no connection in any of this to the banks' creation of money – or if there is, it goes the other way. It is predominantly about housing loans. That is, loans to be able to pay for housing that is becoming increasingly expensive because it is not being built (i.e. supply is decreasing while demand is increasing). Of course, directed government money to housing construction, as before 1990, would reduce the demand for bank-created money.
The state may have created a shortage of money.
I think corporate outsourcing is largely due to the fact that it is easier to have really low-paid workers abroad where they don't become jealous of the wealthy in society.
When the state doesn't create money, production becomes more expensive. Companies are then forced to outsource.
But of course the housing shortage is created to create a need for loans from banks.
The pursuit of costs and profits during the 80s bears a great debt to what is happening today. The idea of increasing productivity has had the opposite effect of increasing stress and sick leave, combined with dysfunctional leadership and politics.
During the 80s, I worked in the automotive industry.
Japan was the pioneer of the zero-error thesis. They developed a process based on the TAO of Yin and Yang, which symbolizes the ancient Chinese philosophy of balance and harmony.
The concept was called Fragile Production in Japan, roughly “sensitive production.” To respond quickly to needs and with short distances.
The principle in the West applies with a calculation model to keep stock available with items for production, in Japan came Just-In-Time. The need for materials is signaled directly from production
Materials and items are "sucked" into production directly from suppliers to minimize inventory volumes. A continuous process. Costs are reduced. No overproduction occurs.
Western companies did not understand. "Fragile Production" but translated it into Lean Production. Minimal resources on site.
At the same time in 1982, an American bestseller came out with the publication of In Search of Excellence for a new leadership and management technique. Three million copies sold
The message spread quickly within the industry and then within municipalities in healthcare and social care. One thesis was:
– The companies and organizations that have the lowest costs survive!!!!!
Like a pandemic, the thesis spread. Huge waves of layoffs resulted and many older people had to leave. The consequence was large gaps with quality deficiencies and, paradoxically, increased costs due to loss of skills.
At that time, centrally controlled organizations and hospitals with heavy bureaucracy that controlled how the operational work worked also developed. The insurance fund created stricter rules for sick leave.
Everything would go faster with fewer people and with a high quality. Ill health, stress and physical exhaustion increase the number of sick days and they increase drastically. Statistics show what happened during the 80s.
To increase the pressure on suppliers, outsourcing or “purchased manufacturing” was developed. Countries with low wages became attractive. China received from the West and other low-wage countries.
But companies lost competence and development in the long term. Suppliers were also able to grow in revenue.
The West is losing ground to the East. China is currently presenting heavy vehicles that run on hydrogen for 1000 km on a single refueling. High-speed trains that run at 450 km/h. Digitalization is increasing rapidly
This technological transition is slower in the West.