Thursday, June 25, 2009

No party in Parliament has the answer to the staggering level of Debt

Government debt: That’ll be £2.2 trillion, please
The amount of money owed by the Government is huge and rising, says Eamonn Butler, so why aren’t we pursuing simple, effective ways to reduce the burden? read more ...


My response:

Sure, labour have borrowed excessively and handled the economy in an appalling and incompetent way. They inherited a golden legacy and wasted it.

They gave a huge amount of control to the banks on day one of coming to power, by allowing the Bank of England to handle interest rates. They also removed the oversight of the city from the Bank of England and gave it to a toothless quango.

But having done all that, labour then sat back and let the banks do what they are solely in existence to do; CREATE DEBT!

At first when these monster-sized debts were being run up, the extra spending boosted the economy massively. Of course, this was ALWAYS going to be unsustainable.

This is not realisation with the benefit of hindsight either. I was writing warning of this 8 years ago, when every one else was praising a chancellor for being prudent and overseeing a boom, when in reality all he was doing was encouraging profligate lending and his only, sole action in managing the economy was by the gross overtaxing of the resulting boom, to waste the proceeds building a client state of pen-pushers and layabouts. That was ALL he did! This was the imposition of the remedial version of the old socialist classical labour economic rulebook. Page1 states Overtax and page 2 states spend badly. So I am NOT removing the blame for the terrifying amount of borrowing from labour at all.

However, by so giving so much power to the banks to create uncontrolled excessive debt, and by those banks doing what banks are solely in existence to do, of course the current mess is the Banks' fault. Or more precisely, the fault of the banking system.

Think about it. IF we have the power to create money out of thin air (and we DO. After all money is NOT backed by anything of value today) Then why is there any debt? We can create enough money to pay off the debt and have an instant full economic recovery.

The problem is, the current system of fractional reserve banking of fiat currencies makes it impossible to do. Every single pound created is created with a debt of interest already attached. That interest is NEVER created and so can never be repaid except by the creation of more interest bearing debt. Every new pound created INCREASES the amount of debt.

Unfortunately, none of the current Parliamentary parties are proposing to do anything about it either. Labour, Tories and the Liberals ALL are in collusion with the global banking establishment to keep that system in place to the bitter and totalitarian end. ALL those parties put the banking elite before the needs of the people. They are all traitors.

We need the political will to remove the power to create money from the banks and assign it to elected officials. Money should be created interest free and be based on a resource of real value.

That and ONLY that, will solve the economic problems we have and have the added benefit of returning money to being our servant, a useful tool, and stop being our master and enslaver.

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