Consider the highly damaging effect austerity measures are having on the economies of Greece, Spain and other EU countries designed to bring their debt levels under control. Now consider Britain’s economy, sustained by continued Government borrowing and reliant upon the consumer spending power generated by welfare benefits and State funded pensions?
In his March budget speech, the Chancellor of the Exchequer spoke of the fall in Government borrowing. He forecast further falls in new borrowing for each of the next five years, with projections that will increase the National Debt by almost another half a trillion pounds.
Is it not the case that debt is the one factor controlling whether an economy expands or falls into recession?
Today as a nation people we have debts amounting to £2.3 trillion*, while our collective bank accounts contain only £2.1 trillion* with which to repay those debts, leaving the country with no money and still with a debt of £200 billion pounds.
How can the Nation’s economy possibly recover, when the very taxes collected by Government is funded with money that has been borrowed by someone, with even the debt interest is paid with borrowed money?
This is a situation which has been allowed to develop over the years as cash expenditure has fallen in favour of ever more debt financed spending.
Can prosperity ever return to Britain until the controlling power of debt is acknowledged and fundamental changes are made to the financial structure of our economy?
The question now is how can this message be brought to those expected to know better, but clearly do not? A letter to the Prime Minister was passed by No. 10 to the Treasury for reply, who failed to address the questions asked. Letters to the opposition do not even receive the courtesy of an acknowledgement. While replies to letters written to journalists and others, ignore the part debt plays in the drive for prosperity.
Through the enactment of the 1844 Bank Reform Act, politicians had the courage to remove from the commercial banks their ability to print new currency notes without restriction A practice that had been distorting the Nation’s economic stability. That same political courage is now needed to bring in a new Reforming Act preventing commercial banks from creating new money electronically** at great financial benefit to themselves and at great cost to the rest of us. A cost that is added to whatever we purchase.
Calculate the annual interest at 5% on borrowings of £2.3 trillion. ***
* February, 2013 figures taken from Bank of England Data Statistics.
**New money is created by tapping a few keys on a computer, which automatically increases the borrower’s bank balance by the amount borrowed.
*** Answer £115 billion per annum.