Solving the credit crisis

Currently all the government interventions are tackling the symptoms and exacerbating the causes of the crisis.

It’s not difficult to resolve the credit crisis. All we need to do is think carefully and creatively to develop a money system that is safe, secure, equitable and works as money, not as debt.

We need to replace the debt-based money ststem with a zero-based system. Reduce interest rates to zero and issue money (not debt) to replace debt as it’s paid off over time. This will solve the existing problems and transform the way in which we facilitate trade and measure value. It’s a paradigm shift so it might be tricky for economists, politicians and assorted power brokers to grasp, let alone implement.

But there are recent signs that the odd politician is thinking about this: Senator Dennis Kucinich in the USA and James Robertson in Britain are both talking about “nationalising the money system” rather than the banks – so all hope is not yet lost.

Abe Licoln put it like this:

“The Government should create, issue, and circulate all the currency and credit needed to satisfy the spending power of the Government and the buying power of consumers… 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 long-felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest. The financing of all public enterprises, and the conduct of the Treasury will become matters of practical administration. Money will cease to be master and become the servant of humanity.”

I couldn’t put it better myself.  Think about it: is there a more stupid way for the government to spend money than by borrowing from the banks and then repaying it with interest? As Abe might say, gimme a break!


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