The tax or cuts debate is a distraction from the real issues  which are about debt and our dysfunctional credit-based money stystem

G20 has kindly decided to give $1 trillion to the IMF and the World Bank…who will loan the money to the poorest communities in the world. These commnities will need to repay the loans with interest, which the IMF and worldbank will keep as their profits.

Credit is a dysfunctional form of money; it is money issued in parallel with debt. When people understand the diffence between money and credit, then we can start to tackle the debt debacle.

Dear Polly,

you have made some insightful arguments, especially your fiscal suggestions in the final paragraph.

But there is an elephant in the room: both Labour and Tories, most economic and financial advisers and media commentators (and all the bankers) have ignored the one strategy that will tackle the underlying causes of the credit crunch. You rightly identify the ongoing “tax and spend” debate, but this debate neatly (and comprehensively) sidesteps the real issue. The state does not have to borrow in order to spend; ask yourself this – where do they borrow from? Every country in the world is in debt…where do they borrow from?

Here is the elephant – the banks, not the government, create almost all (over 90%) of the money supply. So reform the money system by nationalising the power of money creation.

Now imagine: the government takes reponsibility for creating 100% of money (legal tender!) and the banks are limited to doing what banks should do, i.e. taking deposits and issuing loans based on these deposits (with strict liquidity ratios). The government issues money into the economy as it sees fit (health, education, jobs, public transport, environmental work, etc). This money is interest free and goes into productive circulation in the economy.

What a dramatic contrast to the current situation, whereby the state borrows from the banks, creating money and debt in parrallel, then repays the banks with interest, which the bankers keep as profits – a double payday for the bankers. The banks have always campaigned to retain this arrangement, since they benefit so much from having the power and the priviledge of creating money out of thin air.

You don’t have to weigh an elephant to know it’s heavy.

I invite you to join the campaign launched by James Robertson (www.jamesrobertson.com) to get this proposal (to nationalise the money system) onto the agenda of the G20 meeting in April. James also proposes to introduce an international currency to overcome the international aspects of the credit crunch.

I’ll leave the last word to Abraham Lincoln:

“The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government’s greatest creative opportunity. By the adoption of these principles… the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.”

Here’s a new campaigning group I’ve just joined – www.dosomethingaboutit.org.uk

http://votersthink.org/?p=1073

UNBELIEVABLE! Listen to this ONE MINUTE youtube clip. I’ve been trying to get this into the public domain for years – will the USA government really nationalise the money system? Incredible..Issuing money into the economy is so much more sensible than issuing debt that I don’t understand why there isn’t a mass campaign for it: if debt is the problem, money is the solution, doh!

It’s interesting to note that, despite government assurances, there seems to be no regulation of the banks as promised by the government last year…even the temporary ban on short selling was lifted a week ago!

Surely the answer to the financial crisis is relatively simple, and has been clearly stated by people far more notable than me – former presidents and Bank of England directors have repeatedly called for the power of the banks to issue debt to be curtailed (reintroduce sensible liquidity ratios) and for the governent to take control of the issue of money instead.

Why not issue a citizens income to every individual in the UK over the age of 25? This would be money (as opposed to debt) and would enable us to dismantle much of the welfare state, the asociated dependency culture, and to simplify the tax system.

In this time of calls for radical thinking, it’s quite ironic that the movers and shakers have such a strong ideological commitment to the money markets that they cannot even see that their interventions are adding fuel to the fire. The polititians continue to seek advice from the bankers, which is like asking the Horseman for advice during the Apocalypse.

On a more positive note – at least the environment will get some much needed breathing space as economies decline. Less pollution, less greenhouse gasses, a reduction in the manic rates of resource depletion…
All hope seems to lie with President Obama now. No pressure dude!

“If all the bank loans were paid, no one could have a bank deposit,
and there would not be a dollar of coin or currency in circulation.
This is a staggering thought. We are completely dependent on the
commercial Banks. Someone has to borrow every dollar we have in
circulation, cash or credit. If the Banks create ample synthetic money
we are prosperous; if not, we starve. We are absolutely without a
permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon.”

“The issuing power should be taken from the banks and restored to the people to whom it properly belongs [otherwise]…the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless”

“The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight-of-hand that was ever invented. Banking was conceived in inequity and born in sin… But if you want to continue to be slaves of the bankers and pay the cost of your own slavery, then let the bankers continue to create money and control credit .”

Some Canadian researcher estimated that less than 1 in 1,000 people understand what money is and how it is created! There are lots of ways to get informed about money. Stephen Zarlenga spent 12 years writing “The Lost Science of Money”, reading 800 sources in the process.  Or read “The Grip of Death” by Michael Rowbotham (a translation from the original Latin words Mort and Gage – Mortgage).  Or just google “monetary reform” and spend halfsome time surfing… you’ll find that there are thousands of people who have been warning about the credit crunch for decades! People like Anne Pettifor, Sabine McNeill, James Robertson and so on.

Get informed – good luck!