In June last year, the British Government set up a commission to report on changes to the banking system in the wake of the financial crash and bailout; genuine reformers don’t think much of it.
Imagine trying to fight a deadly epidemic without acknowledging the germ theory of disease. Reforming banking without any meaningful mention of usury is a similar proposition. After the crash and the taxpayer bailout – something that was done on both sides of the Atlantic with no public consultation whatsoever – the government of the day set up a commission ostensibly to investigate what went wrong and how to ensure that it didn’t go wrong on this scale again.
The results, for what they are worth, can be found here.
Ben Dyson and his Positive Money crowd have made a thorough analysis, and have responded with a short video and a lengthier written critique in Portable Document Format. Although dated 4 July 2011, it has just been mailed out. They are also holding two public meetings later this month in the North of England and Northern Ireland. Full details can be found on the Positive Money homepage.
It has to be stressed again and again that this is not rocket science. When a bank lends money it actually creates credit; when the original loan is repayed, the new money is cancelled out of existence, but the interest remains as a debt. Because the banks have a monopoly (aside from the 3% or so note and coin issue), these “loans” cannot be repaid. There is a shortage of money, and eventually some sort of default must occur.
The rectification of this problem is extremely simple; money must not be created as a debt, and sovereign governments in particular should not borrow money they have the right to create themselves. If the banks can do it and charge for it, the government can do it and not charge for it.
If you can’t attend one of Positive Money’s meetings, check out their website and videos; this is a movement whose time has come.
[The above op-ed was first published August 3, 2011.]
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