Original post by Polymath0I want to emphasise first and foremost that I don't belong to any particular sociopolitical ideology. I am a free thinker. I believe that there is an element of truth in every persuasion of thought, and that information ought to be gleaned in order to arrive at any given truth. It is all about reading between the blurred lines so as to connect the dots.
On that basis, I kindly request that you resist the temptation to respond with an ideologically charged opinion. You are entitled to your opinions, but you are certainly not entitled to your own facts. I want the discussion to flow with the facts and lead wherever it may.
This is just to lay the ground rules, which are hopefully reasonable enough for adherence.
As to the main discussion...
The Bank of England released a quarterly bulletin last year, in March, entitled "money creation in the modern economy." It states, clearly, that the private commercial banks have a monopoly over the creation of money. It is the process of lending which creates a new deposit of money, and the bank does not borrow from savers in order to lend to customers.
I want to know the reason why the money supply can't be nationalised so that the government can be the sole issuer of money, provided checks and balances are in place. I will discuss the checks and balances that can be applied at a later stage. Note that I am not advocating the nationalisation of the private banking cartel. That is not the problem. Commercial banks can be stripped of the power to create money and simply serve as an intermediary between savers and borrowers, which is already perceived to be its usual business.
The problem is that all money in the economy is debt-based. If we want more money, it necessarily has to come with a corresponding debt. If we want less debt, we necessarily have to suffer with less money. Such is the bipolar nature of the current system. I am advocating a way to separate debt and money from each other.
I have a proposal in mind, but I will reveal it in a piecemeal fashion so that every point can be fully digested. If there is uncertainty in some area or a need for clarification, do enquire.
In principle, what is the problem with the state creating and issuing money free of debt in order to finance public services and infrastructure projects? Why is it perceived as a natural state of affairs that the government has given a private banking cartel the privilege to create money and must borrow from the same banking cartel (through the issuance of gilts), when it can easily create money on its own without needing to go into debt?
If a government can issue a bond, why can't it issue a bill?
The obvious benefit is that most forms of taxation (income tax, council tax, etc.) can be abolished and there would be lower levels of private debt as a result of a greater amount of debt-free money circulating the economy.
I want to receive factual objections. Thanks.