by Jon Davy
It is becoming obvious that the West is in serious economic trouble.
Whether the UK stays in the EU or (unlikely) is allowed to escape from it (it’s a trap!), years of trying to operate with a ruddy stupid debt-based money system have brought us inexorably to the brink of a ruinous debt-built precipice and, there is no way around it, we are going to have to reform the system or die.
The problem with the system is briefly explained in Steve Cook’s article here.
The same article outlines how we can reform the system to us to give us all a chance to flourish and prosper (and by all, I mean the entire human community of this planet).
In my view though, the article does not go far enough.
We must, must, must for sure reform our money system to one where money is not created and issued as interest-bearing debt. For the economy to run right and reward our efforts to produce and prosper, the fundamental of a proper means of exchange has to be in place.
Having a properly functioning means of exchange that does not penalise and sabotage our honest efforts to produce with overwhelming mountains of ever-increasing tax and debt, we can get on with the business of producing our way out of trouble.
So we need to do two things:
- Reform our system of money creation to one where money is based upon PRODUCTION, not debt. Steve’s article explains this adequately enough.
- PRODUCE our way out of trouble, get busy producing goods and services for our own consumption and for export. It is simple economics. If you wanna be well off you have to produce some kind of goods or a service for which others are willing to offer you in exchange what they produce. The only way to be well off without producing is essentially by relying on charity or theft.The better you produce, the better off you will be.
Government can make itself useful in this regard by: doing (1) above and then (2) encouraging, supporting and rewarding production instead of continually impeding, inhibiting or penalising it.
As I say, Steve explains things quite well, but let me give you in a nutshell WHY the money system has to be reformed if our efforts to produce our way out of trouble are not to be sabotaged.
Money is the system of tokens we use to facilitate the exchange among people of the goods and services they produce.
When we raise production/increase economic activity, the amount of goods and services people are trying to exchange – by population growth, more goods coming onto the market and so forth – we need to increase the stock of circulating money commensurately, lest money becomes too scarce relative to the amount of exchange of goods and services people are trying to carry out.
Thus new money must be created and gotten into circulation.
The current, hideously flawed method by which new money is created and gotten into circulation is (a) the banks create it and (b) the banks then lend it AT INTEREST to you, me, industry and government. The borrowers of that new money then go and spend it and thus it circulates.
But the new money has been loaned AT INTEREST, so that every time new money is created a GREATER AMOUNT OF DEBT is created (loan plus interest).
Under this system, if we increase production, WE INCREASE the debt burden that you, I, industry or government must carry. It also means that for money to exist, SOMEONE – or many someones -MUST carry debt.
So under this system, if we now try to make our country truly prosperous, borrowing and the amount of debt being carried increase. This simple explanation should enable you to see that the debt-based money system is a trap.
Can we as a nation produce our way out of trouble?
Is it actually possible for a country in economic disarray and decline to increase its production, become self-reliant, and economically vibrant all without increasing the debt burden being carried by its people?
Yes it is.
And if Russia (which at the beginning of the century was in dire straits) can do it, so can we.
All we need is:
- People able and willing to produce
- A money system not based on debt
- A sensible, competent government working for all the people.
Russia is very fortunate to have 1,2 and 3 and the results are there for all to see.
We, sadly, only have 1.
Times must change.
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