George Osborne says that we've run out of money, so we all must pay more taxes and have less public services. According to the chancellor there's no Plan B - but he's utterly wrong. We could make one simple spending cut that could make all others unnecessary: cut the benefits to bankers.
Banks are the most heavily subsidised businesses in the world, specially protected by governments. While the money runs out for the rest of us the largest private banks still thrive. This is because they get the biggest subsidy of them all -- the licence to create money: http://www.positivemoney.org.uk/
Hard to believe? Martin Wolf, the Chief Economics Editor at the Financial Times, said it recently: "The essence of the contemporary monetary system is creation of money, out of nothing, by private banks' often foolish lending…"
You heard that right. Private banks create money out of nothing!
If you've ever wondered why the bank buildings around the world soar higher than any palace or spire ever did, you now have the answer.
But the banks don't simply print money using secret printing presses in their basements. They don't have to. Like so many other things these days, printing money has now gone digital. With the popular use of debit cards, electronic fund transfers, and internet banking, only 3% of the money in the UK is now made of paper and metal coin. The other 97% is entirely in computers. Electronic money is convenient for everyone, but it's especially convenient for the private banks, since they own, run, and control the entire digital money system.
No bank has ever been charged with counterfeiting because the laws are nearly 2 centuries out of date. So while it's illegal for you or I to print a few £10 notes, it's not illegal for commercial banks to digitally print tens of billions of pounds every single year.
So what do you think would happen if we gave profit-seeking bankers a licence to print digital money, and bonuses and commissions to encourage them to create more?
Would they spend it on things we need, like schools, hospitals, universities, the NHS and the police?
No. They'd probably use it to gamble on financial markets and push house prices out of reach of ordinary people by pumping hundreds of billions of pounds into risky mortgages.
This is exactly how the banks caused the financial crisis that we are paying for now with our cuts in public services.
It also means that we end up with the society and economy that the bankers want to see. If something is good for society but doesn't generate a profit for the money lenders, the banks can turn off their digital printing press. More often than not, that's exactly what we do. This is why we ended up with an economy based on property speculation and an army of overpaid paper pushers in the City doing what things that the chairman of the FSA [Lord Turner] described as 'socially useless'.
So, it was the banks who caused this crisis, and if we leave them with the power to create money, they'll make it happen all over again. We simply can't trust them with the power to create money.
In fact, no small group of self-interest people can be trusted with this power - not profit-seeking bankers, and not vote-seeking politicians.
We have to take this power back. We need to reclaim the power to create money, and make sure it's used democratically, responsibly and transparently for public benefit, rather than to enrich bankers or help politicians win elections. If we can't afford to run hospitals and build schools, then we simply can't afford to be subsidising bankers.
So, George Osborne: It's obvious that we are not all in this together, and that you'd prefer us to go without vital public services in order to protect the good times for the banks. Instead of asking us to live within our means, you're asking us to live with less in order to pay the bankers. Instead of passing the cost onto the banks that caused the crisis, the government has cut our public services and raised taxes that hurt the poor more than the rich. That's not cool.
There’s no need for cuts and student fees. There is just one good cut that we need to make, and that’s to cut benefits to the banks that have ruined our economy and buried us under a mountain of debt.
So join us in demanding that the government chooses our Plan B for the UK economy - let's cut benefits for bankers instead of cutting the public services we need. No cuts, no tax hikes, and no more benefits for banks!
