Why Create Another Problem When You Already Have One?

The announced £140bn cheap funding for British banks is further confirmation, if that were needed, that current economic recovery is wholly dependant upon debt. That unless businesses and individuals are willing and able to burden themselves with ever more debt, there cannot be an economic recovery.

Why is it that debt is seen as the sole answer to our financial problems, when debt was the cause of those problems in the first place?

Why provide cheap finance to the banks, when their debt creation policies caused the present financial problems?

Why are politicians so blinded by past practice and convention that they cannot see that it was those same practices and conventions that have brought us to where we are today?

Why do leading politician the world over have no answers to the worlds financial problems? Problems which are growing week by week?  Why are those leaders so closed to new thinking? Could it be that they lack an understanding of economics? Or do they fear the power of the banks?

Is more debt the only way to kick start the economy?

Economic recovery depends upon spending power and a money supply sufficient to meet people’s everyday needs. Were it not for the fact the Government is paying out huge sums every month supplementing the money supply through the provision of pensions and a multitude of social benefits, the financial situation would now be even more dire.

Just think about that for a moment, is there not telling us something?

Through its taxation policies, the Government is stripping money away from businesses and individuals, thereby reducing  both spending power. and potential business growth. With falling demand for goods and services comes unemployment and less tax.

Is it not obvious that the answer lies in getting more spending power into the hands of the consumers?

Could that not have been simply and quickly achieved if the Bank of England had paid the proposed £140bn debt free, into the Government’s own bank account in a properly regulated manner? Not forgetting the earlier £325bn ‘QE’ money already created which has achieved little , whilst adding more problems for another day. Putting things off is all very well, but never forget that the future will one day become today, then what will they do?

What could that £140bn achieve?

• A reduction in the VAT rate, thereby reducing prices?

• A further increase in the personal allowance?

• The financing of, for example, improvement of natural infrastructure, providing employment? The longer that is left the higher will be the final cost.

• A reduction in Government borrowing with its accumulating interest costs.

Just a few immediate thoughts that has not put too big a strain on my brain Mr Cameron and Mr Osborne.