This post was originally published on 20 February 2009.
The notion of having our economies based on debt has been around for hundreds of years, perhaps longer. Here in the UK we had it foisted on us in 1694, when the Bank of England was established to lend the government of the day £1.2 million to help finance the perennial wars against France.
The chief architect of this system at that time was someone called William Patterson, whose motto was "Thus you labour, but not for yourselves". In other words, "You do all the labour, and I'll receive the rewards". Such arrogance is breathtaking.
Soon the government found that it actually owed not £1.2 million, but £20 million, and then £30 million, and a few years further on it topped £100 million. This became known as the National Debt which, like the poor, is always with us. Because successive politicians who aspired to government learned that this was the way to raise money needed by the government.
"Every Loan Creates A Deposit"
Sure, they sold government bonds to the public as well. But the vast bulk of government debt, or "gilt-edged securities", were bought up by private bankers and the Bank of England. And how did they get the money to lend to the government? Well, since "every loan creates a deposit" under the topsy-turvy laws of banking, the very fact that the government owed them more money provided the "capital" for the money lenders to be able to lend out even more (and collect the interest and stipulate terms).
So the power and influence of finance, and, later, international finance, over the affairs of nations grew like a cancer. And now, in the UK, it has just been announced by our Office of National Statistics that the National Debt, having been just over half a trillion pounds only a few months ago, has now topped £2 trillion.
That's two thousand billion pounds, or £2,000,000,000,000. It's a figure that few of us can even imagine. And to pay it back we would have to hand over all our Gross Domestic Product for several years. Even if that were possible in terms of all of us foregoing all food, clothing, shelter, and other essentials, not to mention luxuries, we would run out of money long before the debt was repaid.
Even Worse In The US
In the United States the situation is if anything even worse. The National Debt of the United States is now around $65.5 trillion. That's about the value of its Gross Domestic Product for four years, or more than the whole of the wealth produced by the whole world in a year.
We all know instinctively that this just isn't right. Why should national governments, rightly answerable to the people every few years when elections come round, have to borrow the money they need (over and above what they raise by taxation)? Most people think that governments either issue their own money or control and own the Central Bank that merely does this as a task on behalf of the government.
But that's not the case at all. Although much has been made in the controlled media of the Federal Reserve, in the US, and the Bank of England, in the UK, "printing" money, that is really not the point. Of course some institution has to "print" money - it's a man-made invention. Tokens for the exchange of wealth, articles of value, and so on, to facilitate trade, are an essential commodity in any modern civilization.
All New Money Is Debt
Where the divergence takes place, between what most people think happens and what really happens, is how the newly created money is treated. And how it is treated is as a debt, owed to the shadowy figures who control the money system. They are the people to whom, under this racket, all this money is owed.
Of course only a tiny fraction of all this debt will ever be repaid (which makes the whole system all the more ridiculous). But, again, that is not really the point. The shadowy figures, the money power, or whatever you want to call them, are more concerned with power than with getting this "money" back. They only created the money out of thin air anyway (it's laughable to think they pretended to have a few hundred billion at a time lying about to lend out to governments in a financial crisis).
But it's the interest payments, running at an astronomical figure each year, and the power over governments, that international finance, and their lackeys among the global elite, thrive on.
This unelected, unaccountable elite create the credit by which we all are their debtors. If not on a personal level then as taxpayers, where our tax money is largely used simply to service these fictitious loans. Let's do all we can to expose this evil system and the shadowy figures who exercise such terrifying power for their own sinister ends, such as shown in this video of the famous film maker, Aaron Russo.
So . . . Spread the word!