Professor Jem Bendell

notes from a strategist and educator on social and organisational change

Dumb ideas on the deficit

Posted by jembendell on May 18, 2010

The new government is getting ready to cut public spending to reduce the deficit. That means people losing their jobs, and people who need support getting more “efficient” support i.e. less. Someone you know is probably worrying about their job; maybe they’ve told you, maybe they just didn’t seem their usual selves.

So, as it seems rather peculiar to me that a government doesnt own its own currency and therefore gets into debt in its own currency, here are some dumb ideas to reduce the deficit, not the country.

First, tell the Bank of England to write off all UK government bonds, or gilts, that it holds. No arguments, replace any bureaucrats at the bank if they disagree.

Second, tell those banks that the government has major shareholdings in to loan pounds to the government at zero interest, to a certain proscribed level that the bank can administer without failing.

Third, pass legislation requiring all banks registered in the UK to lend a certain percentage of all their loans to the government at zero interest.

Fourth, charter a new bank, the Bank of Britain, wholly owned by the tax payers of the UK (one tax payer one share, non tradeable), that would have assets such as national treasures assigned to it as collateral, and instruct it to use the maximum of its fractional reserve lending powers to lend pounds to the UK government without interest, and instruct the Bank of England to give the Bank of Britain it’s full support.

Fifth, tell the Royal Family that they must donate any shares in the subsidiary of the Bank of England (BoE Nominees) and any government-related shares (Treasury Stock) to the new Bank of Britain to demonstrate their duty as principle citizens at a time of financial crisis. If they dont, make the request public. If they still dont, then legislate for it.

Sixth, outlaw mechanisms financiers could use to bring down the economy or the government, such as short selling of certain items and the use of dark pool masked trades, and issue clarification that commercial acts intended to force governments to collapse is treason. It might be less dumb to take this action first, not last.

Seventh, establish a Financial Truth and Reconciliation Commission to explore how the current monetary system was designed, who designed it, and the necessary restorative justice, and also a Monetary Democracy Inquiry to explore policy options at home and abroad for a fair and sustainable financial sector.

As these ideas havent been argued by specialists and politicians, I must presume that are dumb ideas. Therefore I would benefit greatly from any teaching from monetarists or lawyers explaining why precisely each of these ideas is unworkable, and are more dumb than stopping able-bodied people from using their skills to help their neighbours in our “big society”, just because of a change to our money supply?

Or is it dumb to say the pound is ours?

2 Responses to “Dumb ideas on the deficit”

  1. matslats said

    That’s totally dumb.
    Although you’re not the only ignoramus in the room
    http://www.bankofenglandact.co.uk/act/

  2. Jem said

    Thanks Matt. Thats an interesting campaign… its the kind of thing that the current ukuncut protestors could/should connect with to get at the root of the current troubles

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