Monday, 25 October 2010

Repsonse to Comprehensive Spending Review

I am appalled by the austerity measures announced by George Osborne, as reported this week. And even more specifically apalled by the reaction of our, so called 'leaders', locally, to those measures.

It is clear that after all I said to them in the election earlier this year, they have done nothing to make themselves aware of the workings of the monetary system that operates in this country.

The cuts announced in the spending review will do nothing to reduce the national debt, and they don’t come close to achieving the abolition of the deficit by 2015, as has been reported.

I am sorry to have to keep banging this drum, but it is time that somebody in government or the media explained to the people they purport to represent, that there is a difference between the deficit and the National Debt. The deficit is the government’s shortfall in revenue each year. The difference between the amount it receives in taxation and the amount it spends year on year. The nation’s debt increases each year by the amount of the deficit.

It is estimated that the deficit will be in the region of £155bn for each of the next four years of this parliament. (An increase in the national debt of £620bn by the time of the next election.) The cuts in public spending of £81bn over the next four years will do little to improve our overall situation. It is now too late for measures such as this.

It is now time for a radical shake up of the monetary policy of the country.

Currently 97% of all money created in this country is done so by privately owned corporations known as banks. It can’t be beyond the wit of the government to see that it is this situation that needs to change.

Two years ago, Alistair Darling allowed the Bank of England to print £200bn, the so called “quantitative easing”. His intention was to stimulate growth in the economy. This was in a year when the government’s borrowing was in the region of £160bn, the mistake Alistair made was to put this printed money into circulation by giving it to the banks to lend to us. The banks didn’t.

He should have put the £200 billion into circulation through the pay packets of our public sector workers.

The Bank of England Monetary Policy Committee is again suggesting another round of Quantitative Easing, the so called “QE2”. But will this Government spot what the other did wrong last time?

The only way to resolve the question of deficit (and debt) is to remove control of the creation of money from the banks and give it to the mint. Where it belongs.

Both sides in this issue are in thrall to a disastrous orthodoxy which is predicated on a misunderstanding (or a lie).

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