I'm increasingly convinced that this sort of proposition should be the ultimate aim of reform. Yes, we can try and fix the immediate problem by (a) forcing central banks to lend governments the money they need to get out of debt and/or (b) setting up citizens banks that exploit the insane fractional reserve lending mechanism to get out of debt.
But these solutions are just short term. There can be no doubt in my mind that money creation by commercial banks is impossible to justify. Sure, the bankers will be fighting like crazy to keep their gravy train on the rails, but I defy anyone reading this to explain why it is more "reasonable" to allow commercial banks to create the money needed to allow the economy to function, rather than giving that function to governments.
I think that my proposal to use an automatically varying Financial Transaction Tax to remove the excess money from the system completely demolishes the standard argument used by people like Angela Merkel that claims that if governments were able to create the money supply there would be runaway inflation.
In any case, that argument is clearly completely phoney. To work, you would have to believe that somehow if you let commercial banks do the money creation for profit, they will somehow be able to magically find just the right level for the money supply. As if they have any motivation to find the "optimal value". Even the most religious believer in the invisible hand of the markets would have a very tough time trying to get anyone to buy such obvious twaddle. Banks create money if they think that it will allow them to make a profit. End of discussion.
No. The bankers will have to admit it. The only reason why the system has been rigged in the way it has been is that it allows them to rake in trillions in interest charges for lending us money THAT THEY DON'T EVEN HAVE TO LEND. It's completely indefensible, and only exists because the whole mechanism has been hidden from public view.
But the people are beginning to wake up. And when the 99% realize that it doesn't have to be that way, there should be no way to stop reform.
Oh, by the way, here's the French version.
Your current president should like the system you propose very much, as he has very few other options to make good on his promises to his voters. He is probably the one person in Europe who has enough power to implement such a system. What are your chances of getting him to notice (and preferably adopt) these proposals?
ReplyDeleteThanks Octogon for the comment. Yes, you're right. François Hollande was elected with a specific mandate. I've contacted some people close to the government, but not much success so far. I'm not giving up though!
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