The only way out of debt

samclam

Hello Everyone, Glad the discussion is still going and not just based on throwing insults.

I've still got to say most people don't really get my point.

I'm not advocating increasing the money supply to the point of inflation. I'm advocating reorganising it away from debt. Therefore we are better off because we are not paying interest on loans that are, for the most part, money created out of thin air. To me that is such a no brainer I don't understand why no one gets it. Why should we pay for something that is created out of nothing? Money is a tool not our master.

House prices are not such a great store of wealth if the government is going to take 40% inheritance tax from your children. People have already paid tax on their wages all their lives so why should they be taxed again? With the proposals of www.call4reform.org you wouldn't even need taxes.

Money has no inherent value, it's value only comes from our labour and resources. In the system I suggest prices could remain the same as they are today because you would simply be swapping out bank loans for new debt free cash. The changes do not have to be made all at once. You could have a hybrid system to begin with where banks' reserve ratios were steadily increased but there is no reason not to finance public expenditure immediately via debt free cash. Why should our taxes go to government bond holders when there is no reason for our government to borrow from anyone?

Without interest payments on debt both individually and nationally we would be in the around 50% better off. Imagine what that would do to our economy and lifestyles.

Arguments that our government would grow too large or that I'm promoting communism are irrelevant to the debate of moving to a debt free system. Our government has grown too large under capitalism anyway. Large institutions both private and pseudo-democratic make far too many decisions on our behalf without really having our best interests at heart already. The same problems used as arguments against what I am saying are already here now. At least we could be around 50% better off with a debt free system!

Call4Reform.org do not go into the political side of things, they are just promoting the money side. I personally think we need political reform but that is another subject to the pure money issue. I think we need a referendum style government similar to the Swiss and Proportional Representation voting. All government should be 100% transparent and all ministers should be accountable to the same Laws as everyone else. They should be subject to public votes of no confidence and expelled without privileges if the public thinks they are corrupt or useless. We should similarly reform the House of Lords. We should not sit by watching our civil rights and privacy eroded by the state, that is a dangerous thing to let happen.

I don't really want to have the political debate here I just want to get across the 'debt free' money concept so people can properly understand it. So far very few people properly understand what I / www.call4reform.org are getting at.

Thrugelmir

Ok. So I have an idea to start a new business. Where does the funding from?

I'm a risk to lend to. There's a high probability my business will fail in the first 3 years. So will default on repaying the debt. Who picks up the tab?

samclam

Thrugelmir wrote: »

Ok. So I have an idea to start a new business. Where does the funding from?

I'm a risk to lend to. There's a high probability my business will fail in the first 3 years. So will default on repaying the debt. Who picks up the tab?

Fair question, various answers:
1. You go to the bank while they are still in transition from the old system and get an old fashioned loan if they will give you one.
2. You get a loan from friends, family, other private sources but the money is loaned from existing debt free cash and not newly created debt created from nothing.
3. The new system is under affect and the banks have been allocated an amount of cash for new businesses. Their team who assesses your prospects, ability, contribution to society, the economy etc. If you sound like a no go then you don't get any cash if you pass you get cash. It would make sense to not give it to you all at once and do something similar to a self build mortgage.

Who foots the bill of failure. Well ultimately you just fail and you don't get any more finance and you're likelihood of getting finance by methods 1. & 3. again decreases. If you were committing fraud then you get your punishment. But the money you spent on your business still goes into circulation in the economy so is still useful.

As long as the money supply is kept at the right level for the economy then your one failure isn't of any consequence. You didn't succeed so you stopped what you were doing and had to find something else to do. It's not so different to how things are now except no one has the burden of interest payments and the instability of defaults.

Most of people's counter arguments apply equally to our current system.

One of the main failings of our current system is that if you ask for interest on top of a loan then you are asking the impossible. There isn't enough money created to pay back both the loan and the interest, it's impossible. That's why they are obsessed with economic growth because unless things keep exponentially growing then loans will start defaulting. And in a finite world it's impossible to keep growing forever. The only other way out is by inflation, which also isn't good. So you get a system that easily goes from bubble to bust.

Money itself shouldn't be the end goal. Money is just a tool, like oil in a machine. We should be able to get on with our lives without it controlling us. We should be living according to our productivity and intelligence not going through mad economic swings because of a crap system and letting the guys running the crap system pay themselves massive bonuses out of our wages.

Because banks aren't lending to small business we are in recession, if the government weren't in their pockets they could get us out of recession virtually overnight by giving new debt free cash to deserving businesses and we would all be better off! The government could have averted recession by letting a few banks fail, forcing them to right off those derivatives and to act like high street banks again instead of wasting Billions bailing them out.

The government doesn't need to borrow from anyone because we are a sovereign nation, we have our own currency and can increase it at will if need be. Why burden future generations with increasing taxes just to pay interest to people who don't even live in this country?

Thrugelmir

Because banks aren't lending to small business we are in recession,

And what are these small businessess going to do with the funding?

samclam

Thrugelmir wrote: »

And what are these small businessess going to do with the funding?

Pay for premises, machinery, materials, staff, all the usual stuff.

The main problem is the viscious circle of rising unemployment > loss of income throughout the economy > more businesses cutting back > more unemployment. People want to work but can't simply because there is not enough cash in the general economy. And it doesn't need to be this way. Oh yeah and it will lead to falling house prices too, unemployed people don't buy houses. Not forgetting that unemployment also places a bigger drain on everyone else for benefits. Viscous circle. Doesn't have to be this way!

nembot

We need fusion before the monetary system can be revised, so much of the worlds $$ revolves around oil, not just billions... f'kin trillions.

It's the greatest catalyst of war, since religion - even in today's so called civilised society.