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  1. The question that should be asked is not why wages can't cover childcare, but why small children have to be farmed out at all - ie, why does it now require seventy to eighty hours of employement (two people working full-time) to meet a family's basic living costs? Comparatively recently, those costs could be met by one person, working a 40- to 45-hour week. Advances in automation should have led to shorter working hours. Instead, governments invent useless jobs and pressurise both parents to consign their small children to nurseries and enter "the workplace" (since when did no work take place within the home?) in a futile attempt to distribute adequate purchasing power. As the continuing advance of new technologies progressively reduces the need for human labour, it is not sensible to depend on full-time employment to distribute incomes. A universal, non-means-tested national dividend would make part-time work and job-sharing financially acceptable, allowing parents more time for the supremely valuable work of caring for their own children. Of course, this practical solution to the problems caused by progress will only be possible by replacing the present debt-based financial system, which distorts and inhibits all economic activity, with one which promotes the creation and distribution of wealth throughout the population - see http://www.positivemoney.org.uk/ .
  2. Without sufficient borrowing, the money supply will shrink - see http://www.positivemoney.org.uk/ - and it's mainly been ludicrously over-valued mortgages that have been providing the necessary borrowing. If we want a stable money supply, without having to rely on more and more people going deeper and deeper into the red on behalf of their country, we have to change the way we provide ourselves with a means of exchange. The Bank of England (Creation of Currency) Bill 2010 shows how this can be done. The Bill is online at http://www.bankofenglandact.co.uk/ .
  3. Don't believe George Osborne. There is a Plan B. What can you do? Support the Bank of England (Creation of Currency) Bill 2010, here: http://www.positivemoney.org.uk/2010/09/douglas-carswell-mp-introduces-bill-to-stop-fractional-reserve-banking/'>http://www.positivemoney.org.uk/students/conference-november-2010/.'>http://www.positivemoney.org.uk/students/conference-november-2010/. Stop feeling helpless - more of us are being harmed by the present financial set-up than profit from it. Get together with like-minded people, and demand reform. http://www.positivemoney.org.uk/ http://www.moneyreformparty.org.uk/
  4. Exactly. There's no reason why everyone shouldn't benefit from automation and the IT revolution ... no reason, that is, except the fact that we still depend on wage packets, salaries and means-tested benefits to distribute purchasing power. You could, in fact, distribute a non-means-tested national dividend "to everyone who is a citizen of the nation". This would encourage part-time work and job-sharing, and would act as a protection against sickness and redundancy. It would also make it possible for a family to enjoy a good standard of living with only one partner being employed outside the home (or both part-time), reducing the stress, overwork, and financial pressure which play a big part in marriage breakdown. Where would the money to pay a national dividend come from? The most sensible proposition would be to stop subsidising the banks to the tune of £200 billion, which is how much they currently profit from being allowed to create our entire non-cash money supply (97% of the total) in the form of compound interest-bearing loans to their customers (especially people taking out over-sized mortgages on over-valued houses). The Bank of England (Creation of Currency) Bill 2010 shows how the necessary reforms can be implemented. By establishing that "every credit to an account must be matched by an equal debit from a different account", it will make it as illegal for the commercial banks to create new non-cash money in the form of "credit" as it already is for them to print notes or to mint coins. Instead of being offered as "loans" from the banks to finance the projects that earn them the biggest profits, new money will be spent directly into circulation by the elected government, on infrastructure and services, or in the form of a national dividend - as indicated by the electorate at general elections. We would no longer be dependent on the mediation of the banks for our national currency. They would be like any other private businesses, and could no longer hold us to ransom. An added advantage offered by the Bill is the possibility of controlling inflation directly, by adjusting the amount of new money issued, instead of depending upon the blunt instrument of fluctuating interest rates (to the alternating detriment of borrowers and savers). The Bank of England (Creation of Currency) Bill is online, with explanations and FAQs, at http://www.bankofenglandact.co.uk/.
  5. People in full-time employment are working longer hours unpaid - so, fewer jobs available. More people can only find part-time work. Wages are being frozen, or forced down by competition for the diminishing number of jobs on offer. Most families need two wage packets to survive. Imports, out-sourcing and automation are increasingly displacing even moderately skilled workers. Even if we don't go into a double-dip recession, a "jobless recovery" is anticipated. Yet orthodox economics states that production automatically distributes enough purchasing power in wage packets and salaries for the population to buy all the goods and services offered for sale. It even expects them to have enough disposable income left over to create the nation's entire non-cash means of exchange (97% of the total) by borrowing it into existence in the form of loans from the banks (in particular, mortgages), at their own risk and expense! We were told in the 50s and 60s that automation would lead to an age of leisure. Now, instead, two people must be employed to provide for a family instead of one (ie, twice the number of hours must be worked for pay per family unit). If goods can now be produced with minimal human labour, why shouldn't we all benefit? More time to fill as we choose doesn't imply idleness. It means we'd be free to do the many useful and satisfying things which are currently being neglected - eg, spend more time with our families, maintain our homes and gardens, study and learn new skills or follow up hobbies, do voluntary work ... Most people could employ themselves far more profitably, in non-financial terms at least, outside the "workplace", which has frequently been created by government not because it answers a useful purpose, but to keep the unemployment figures as low as possible. The present system doesn't work, and with each technological advance it becomes even more inefficient. An alternative way of creating and distributing purchasing power, without forcing anybody into debt, is proposed by The Bank of England (Creation of Currency) Bill 2010. If enacted, the Bill would "make the 'inevitable' cuts in public services completely unnecessary, reduce the tax burden by up to 30% and allow us to clear the national debt". It would make all this possible by taking "control of the UK's money supply out of the hands of the commercial banking sector" restoring it to the state, where it can be used to benefit the economy, rather than providing a £200 billion annual subsidy to the commercial banks. You can read the Bill, with explanatory notes and FAQs, here: http://www.bankofenglandact.co.uk/.
  6. The only conclusion you can draw from these figures is that the financial system has broken down, and is dragging the remnants of the real economy (ie, the one that produces and distributes goods and services, rather than manipulating monetary units) with it. There is no light at the end of the tunnel for most people short of fundamental monetary reform - see The Bank of England (Creation of Currency) Bill 2010, at http://www.bankofenglandact.co.uk/.
  7. Why do you have to accept globalisation and so-called "free" trade (actually compulsory trade, in pursuit of purchasing power)? What exactly would be wrong with protectionism if nations were not forced to export as much real wealth as possible in order to get their hands on some debt-free money (ie, money borrowed into existence by people in other countries, who must continue to service and repay the debt even when the purchasing power it created has left their territory)? Only the need to boost national money stocks which are routinely depleted by the expense of servicing and repaying the debt which created them can explain the present universal obsession with beggaring one's neighbours in the non-stop battle for exports. If national currencies were issued as a public utility, free of any debt at source, cheapness would not be the decisive issue, and quality home production might flourish throughout the world, since there would be no need for nations to exchange anything other than surplus resources and products, or those which were unique to a particular place or people. Co-operation, rather than economic warfare, would become the order of the day, and everyone would be better off. (See http://www.thestirrer.co.uk/whats-the-big-idea-1104091.html). The Bank of England (Creation of Currency) Bill 2010 shows how the switch to a debt-free nationalised money supply can be achieved. Enactment of the Bill would leave the banks themselves in private ownership. However, because they would no longer be permitted to issue 97% of the nation's money supply in the form of "credit" to their customers, they would no longer be able to hold us all to ransom. The Bill is explained in detail at http://www.bankofenglandact.co.uk/.
  8. What is actually pushing us over the edge is not Keynesianism but the decision of successive governments to rely upon debt - not only to finance public spending, but for our basic means of exchange. When a nation is dependent on systemic debt, owing its entire non-cash money supply at compound interest to the private banking system, is it any wonder that it ends up bankrupt? Yet there is no law of nature which decrees that every pound of money created must generate a pound of debt. Money is subject to laws of our choosing, and common-sense would make it a public utility, spent into circulation on infrastructure and public services, and free of any debt at source. At present the privilege of creating all non-cash money (97% of the total money supply) in the form of compound interest-bearing loans to their customers nets the commercial banks what is, in effect, a public subsidy of around £200bn a year. A simple reform could transfer the benefits of issuing all new money to the Treasury, making the 'inevitable' cuts in public services completely unnecessary, reducing the tax burden by up to 30% and allowing us to clear the national debt. (This is not to say that a lot of public spending - for instance on quangos, intrusive regulations and statutes, EU membership, etc - should not be ruthlessly cut.) The Bank of England (Creation of Currency) Bill 2010 establishes the Universal Principle that: "Throughout the entire banking and deposit taking system ... every credit to an account must be matched by an equal debit from a different account." Only the Bank of England will be exempt from this requirement, thereby enjoying sole right to create all of the UK's new non-cash money - as is already the case with cash in the form of notes and coins (now a mere 3% of the money stock), which is sold to the banking system at a small profit to the nation. Enactment of the Bill will nationalise the money supply without nationalising the banks, which will continue to compete for their profits in the open market - with the difference that they will now confine themselves to borrowing and lending money which already exists. The Bank of England (Creation of Currency) Bill 2010 is online, with detailed explanations and FAQs, at http://www.bankofenglandact.co.uk/ .
  9. The answer is not to regulate or nationalise the banking system. The answer is to nationalise the money supply. Deprived of their power to create and allocate all new non-cash money (97% of the total money stock), the banks could be left to sink or swim in the open market, like any other private, profit-making businesses. A simple reform would transfer sole authority to create our national currency to the Bank of England, making it as illegal for the commercial banks to issue non-cash money in the form of "credit" as it already is for them to print notes or to mint coins. It would then be the job of a non-political body with a specific remit, along the lines of the MPC, to decide how much new money was needed at any given time. This would make it possible to control inflation directly, by issuing money or withdrawing it from circulation, rather than attempting to achieve stability with the blunt instrument of interest-rate manipulation. The reform proposed by The Bank of England (Creation of Currency) Bill 2010 can be studied in detail at http://www.bankofenglandact.co.uk/.
  10. Interesting comment. We may well be faced with austerity as an article of faith, if governments refuse to look at alternatives to policies that hit those with the lowest incomes hardest - for instance, the present increase in VAT, an indiscriminate tax which inflates prices at every level of production and distribution - with the rising cost of basic necessities eating deepest into the smallest wage packets. Before we accept that we all deserve to suffer indiscriminately, there are a few questions that need to be asked. Why have we been forced to increase an already over-sized national debt by borrowing billions more to bail out delinquent banks? When are we going to start asking whether a national debt is necessary in first place? When are banks going to be denied the present huge public subsidy they enjoy for the privilege of creating the nation's entire non-cash money supply (97% of the total money stock) as a compound interest-bearing debt owed to themselves? When are the benefits of non-cash money-creation going to belong, instead, to the nation - as the benefits of publicly-created notes and coins (now a mere 3% of the money supply) already are - these being sold to the banks at a small profit to the public exchequer, and (unlike bank-created "credit" money) entering into circulation free of any debt at source? Why not postpone austerity measures until the reforms to the financial system suggested in The Bank of England (Creation of Currency) Bill 2010 (see http://www.bankofenglandact.co.uk/) have at least been tried?
  11. Scroungers? Is it the banks you're talking about? They've had the biggest handouts of all, and don't seem to be suffering from too much "austerity".
  12. At present, governments do not issue non-cash money. The only money governments put directly into circulation is cash (notes and coins), which they actually sell to the banks at a small profit. Cash, however, now accounts for a mere 3% of the total money supply. Just after the war, it was roughly 50%. The remaining 97% of money in circulation is created in the form of compound interest-bearing loans issued by the commercial banks to their customers. Any government spending has to be financed either by taxation or borrowing, which can indeed not only raise taxation but inflate the money supply - though not as inexorably as ordinary bank lending does. By creating excessive sums of new money for the customers and purposes of their choice (increasingly speculative), the commercial banks are the principal agents of inflation. Between 1963 and 1997, for instance, deposits in the UK increased from £14.1bn, of which £9bn was owed to the banks, to £680bn, with £780bn owed to the banks. Since then the money supply has continued to grow exponentially, mainly through asset-price inflation. The latest figures (Bank of England Statistics for April, 2010, http://www.bankofengland.co.uk/statistics/abl/2010/apr/index.pdf) put deposits at £2,460.1bn and bank lending at £2,674.2bn.
  13. That is the theory. Unfortunately the "deposits" they back their lending with aren't actually money (see my post above). A loan, once deposited in a different account from that of the original borrower, is considered to be money, and can be used to back further lending, creating an enormous superstructure of credit. As Andrew Crocket said (Money, 1977), "Taking the banking system as a whole, the act of lending creates, as a direct consequence, deposits exactly equal to the amount of lending undertaken. Provided, therefore, banks all move forward in step, there appears to be no limit to the amount of bank money they can create." He adds: "Even more than this, there would appear to be a basic instability in the banking system."
  14. You're right - any common-sense person would agree that you owe them nothing, because they "lent" you nothing. However, by law they may call the figures they type into your bank account money and call it theirs. The important fact is that we have chosen, by default, to let banks create all of our non-cash currency as a debt owed to them by their customers. This is why we are dependent on the banks - because, as things stand, we have no alternative way of providing ourselves with non-cash money (with the exception of acquiring money created as a debt against people in other countries by exporting more than we import - which is why exports are also crucial). Of course, this could easily be changed, since money, as Aristotle said, is not a fact of nature, but subject to law. It would be comparatively simply to make it as illegal for banks to create non-cash money in the form of credit as it already is for them to mint coins or print notes [see Bank of England (Creation of Currency) Bill 2010, http://www.bankofenglandact.co.uk/]. All money would then be created as a public utility, free from any debt at source. Then the money in your bank account would really be your own.
  15. Yes, bank balances which are in credit are accounted as debts owed by the bank to the depositor. However, since all non-cash money originates as loans made by one or other commercial bank to its customers, a prior claim on all non-cash money is held by the banks which authorised the orginal "loans". You borrow a hundred thousand for a mortage. The bank creates the sum you want by tapping figures into your account. Because it debits nobody else's account, it has just created one hundred thousand pounds of brand new purchasing power, and you owe that sum to the bank. You pay the money "loaned" into the account of the person selling you the house, where it appears as one hundred thousand pounds' worth of credit, owed to nobody: yet at the same time it represents one hundred thousand pounds' worth of debt to the banking system, even though the person whose account it's ended up in isn't the debtor. This is the system we currently use to create our entire non-cash money supply (97% of the total). The problem is that as long as we rely on this system, it's impossible to create new purchasing power without creating an equal amount of debt. Only notes and coins are issued by public authority as a public utility, not owed to anyone at source. Unfortunately, the amount of personal debt in the UK is now so great that all the non-cash money available together with all the originally debt-free notes and coins in circulation are insufficient to repay what's owed to the banks. Therefore, every penny of credit in your account is owed to the banking system (though not by you); and if everybody repaid their debts, we would be without a means of exchange. It is not just the size of banks but the fact that we are completely dependent on their loans for our money supply which makes them too big to fail. The Bank of England (Creation of Currency) Bill 2010 proposes a change in the law which would remedy this, by requiring every credit to an account to be matched by an equal debit from a different account. Only the Bank of England would be exempted from this requirement, allowing it to create the nation's entire money supply, both cash and non-cash, free of any debt at source. It would be as illegal for the commercial banks to create non-cash money as it already is for them to print notes or mint coins. They would then be free to concentrate on the useful business of matching genuine lenders to productive borrowers - with the difference that they would be lending money that already existed, rather than expanding the money supply according to their own priorities as private, profit-making businesses. The Bank of England (Creation of Currency) Bill 2010, togewther with detailed explanations and an FAQ section is online at http://www.bankofenglandact.co.uk/.
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