What is Debt?
Within the population there are many who have run up huge levels of debt on their bank credit cards. Debt at such levels they are never likely to repay in their lifetime. Irresponsible, reprehensible, yes that could be said with some justification. However, in many instances the money borrowed has been simply to provide a family with today’s essentials. Families who, in increasing numbers, are living below the poverty line, notwithstanding state benefits.
Britain’s government has run up debts on its ‘credit cards’ in excess of £1 trillion, a figure beyond imagination. Additional there is the accruing annual interest, a not insignificant sum. Reprehensible, irresponsible? Again you can say yes with some justification, because part of the money borrowed was not well spent, funding departmental inefficiencies and over manning etc. The bulk of it however, was used to subsidise the essential needs of the British people. Making up the shortfall between tax income and expenditure. Funding for health, education, social benefits, the nation’s infra-structure and so on.
In both instances however, the debts incurred have increased the demand for goods and services, providing employment for countless numbers of individuals, who would otherwise have been unemployed. Individuals who, through the tax system, have contributed to the Government’s annual tax income receipts. Without those debts, the recession would now be even deeper.
What do we learn from the above comparisons?
It tells us that without debt, there is insufficient money circulating within the economy to meet basic needs.
It tells us that without excessive debt, anything approaching full employment is just a dream.
It tells us that the population cannot possible pay taxes at a level required to fund Government spending needs.
In other words, debt today is the difference between poverty or temporarily perceived prosperity.
Is that how it was intended to be?
A grocer will only require one grave to be dug, so how is a gravedigger supposed to obtain his grocery needs without access to sufficient money as the means of exchange?
Every person has value whether or not society chooses to make use of them.
Surely it must be the responsibility of any Government to ensure that there is sufficient money circulating to meet societies needs and that of the individual, without the almost total reliance upon debt?
Until there are changes to the financial system, bringing more money, free of debt, into the money supply, then the burden of debt will continue to control our lives.*
* In Britain, out of a total money supply of £2,165 billion (March, 2011), only £57 billion was not based on debt.