Monetary Reform made Easy

[marian farrell]

Here's how a simple reform to the banking system could save us £200 billion each year...

Every year up to £200 billion of new money is created and spent into the economy. Most of us would assume that this new money is created by the government, or at least an agent of the
state. In reality, this new money is created by the private banking
system as debt, and lent into the economy. Between 2000 and 2009, £1,225
billion of new debt has been created by the banks.

Read that again: in the last 10 years, the banks have created up to £200 billion per year, lent this into the economy as mortgages, personal loans and credit cards, and are now
living off the interest. This is what laid the foundation for the debt
crisis that is crippling government and society right now.

If you find this hard to believe, ask an economist. They'll call this process the 'money multiplier' or 'credit expansion' but they really mean the following: private companies
(banks) create money, lend it into the economy, and collect interest on
it. With the exception of the loose change in your pocket,
this is where all our money comes from now - the creation of money as
debt by private companies. Ever wondered why we are in so much debt?!

There is no good economic or practical reason why governments permit the banking sector to create new money while the government itself cannot fund adequate healthcare or
education for its people. The banking system only works in this way
because the law that makes it illegal to print your own £5 notes has not
been updated to apply to the digital, electronic money that now makes
up £97 in every £100. This loophole, in conjunction with a fundamental
flaw in the design of the banking system, means that every single loan
that is taken out actually creates brand new money. (In computing terms,
making a loan is more like 'copy and paste' rather than 'drag and
drop').

So when David Cameron says that 'there is no money', what he means is this: "we've handed the keys to the printing press to private corporations, and now we are dependent on the banking
system to issue the nation's money supply". So to pay off the debt we
need money, but we can only get money if we go into debt. Good luck
solving that one Dave!

But there is a way to change this. There is a way to avoid the tax rises and spending cuts that currently seem inevitable. In fact, there's even a way to do the opposite - cut taxes
and increase spending at the same time - and end the recession in one
fell swoop...

...and here's how we make it happen:

Put simply:

1. Make a few small tweaks to the banking system to prevent commercial banks creating new money every time they make a loan.
2. In place of the banks, set up an independent agent of the state (such as the Royal Mint or the Bank of England) which would be responsible for creating the additional money that the economy
   needs each year to keep running smoothly.
3. Add the newly created money to total government revenue, where it can be used in the same way as tax revenue, or can be used in place of tax revenue to reduce the tax burden.

Doing this would open up a huge range of options. The money that was previously used to generate huge profits for the banks will now come first into the hands of the elected government.
It can then be used to raise the income tax threshold, reduce
regressive taxes that hurt the poor, increase investment in public
services and infrastructure by up to 30%, fund interest-free lending for
government bodies or local councils (saving 70% compared to PFI), or a
combination of all of these.

So this is how a simple reform to the banking system can avoid cuts in public services and save us up to £200 billion a year. If you're thinking that it's easier said than done, there's a
20,000 word manual on exactly how it can be done, plus a fully drafted
model bill at:

>> The Proposed Bank of England Act

And if your head is now spinning and you need a plain-English explanation of how this monumental con-trick works, and why it's destroying the economy, you'll find it here:

www.BenDyson.com

The current financial system doesn't work - that should be obvious to everyone. But so far no-one is looking at the root of the problem. That needs to change. Head to one of the sites
above, sign up for the newsletter and we'll keep you updated as the
campaign picks up speed...