Index Wales Green Party: Note [2] of the E-zine reproduced below!
ELECTRONZ ISSUE 406 16 February 2004
Weekly international E-zine focusing on the New Economics. In this issue:
[ 13 ] BANKS STARTING IRAQI PICNIC [back]
[ 14 ] WALES INDEPENDENT PARTY PUSHING FOR REFORM
That western extension of the English mainland is better known for producing footballers than academics, but they have produced an independent political party which has hitched its wagon to a monetary reform star, and provided an Internet Summary of the substantial Benefits over present high Costs of the status quo system. Details are at www.resurgencecymru.org. But it is twisting the financial tiger's tail a bit, so do not expect the main international news agencies to cover it until it is old hat.
The IWP (Independent Wales Party) promotes their reform package as Economic Democracy (ED), and leads in with some backgrounding points and principles, inter alia:
Using monetary reform mechanisms, an ED Principle is that a nation's Money Supply and Economy should be managed as a Public Good.
ED rejects the prevailing practice and principle which allows virtually all the Money Supply to be created and controlled by a small minority through the banking system for their own personal benefit.
Aside from the Reserve Bank which mints and issues Legal Tender, being in effect the Petty Cash, over 97% of the Money Supply is created by the financial institutions and lent into existence as interest bearing loans.
As virtually the whole Money Stock remains in existence as interest bearing debt, more borrowing to pay interest and cover expanding production and infrastructures every year is inescapable with its compounding effect.
With multi-stage production processes all depending on an interest bearing money supply, they note that that 50% of production costs could be the total cumulative costs of compounded interest.
It is also recognised that the lower one is on the income ladder, the greater the percentage of income is consumed by interest, so that it functions as a mechanism to make the poor poorer while making the rich richer..
The IWP summarises the advantages to the Community of a debt-free Money Supply as follows:
1.A debt-free money supply issued by a Central Bank of Wales on behalf of the nation's government and people would be the property of society and be treated as public revenue rather than commercial profit.
2.Taxes could be reduced or public expenditure increased, or both. The financial benefit would be substantial as large amounts of debt-free money would be required to balance the debt-based supply and reduce inflationary pressure of compound interest charges.
3.By removing the 'private money creation tax' (compound interest bearing loans created by banks out of thin air) it would remove unfair economic distortions and massive unearned subsidies currently enjoyed by the financial sector.
4.In the UK debt-based system, lower income earners pay a higher proportion of their incomes on interest charges. Only the top 20% income earners receive more in interest than they pay. A debt-free money supply for Wales would halt this continual transfer of wealth from the poorest to the richest in society.
5.The national economy of Wales would be far more stable than at present and resistant to ill effects of increasing global recession. This is because the money supply would not contract as some industries get into difficulties and were liquidated. The level of purchasing power would remain consistent and demand would be created in other sectors. The money supply would also not be dependent on "consumer confidence" (the willingness of people to continue borrowing and go deeper into debt).
6.A debt-free money supply would create a prosperous but stable economic system that is not locked into perpetual growth to avoid collapse as is the case with the current UK debt-based system. A debt-free money supply for Wales would ensure economic sustainability so we can face the future, and the future of our children, with real confidence.
7.In the UK debt-based system we currently operate under, money is created and channelled purely for the interests of private financial institutions.
This is because banks determine who can borrow and for what purpose. The system favours multinational corporations and the rich and discriminates against smaller businesses, individuals, and communities. A debt-free money supply for Wales created and spent on behalf of the nation could rectify this inherent distortion and bias in the UK debt-based system.