Where did the billions of pounds go?


Michael Linton, the founder of the Open Money Project, says that money is really an immaterial measure, like an inch, or a gallon, or a pound, or a degree.

To speak of a lack of money is absurd: like a builder saying he can’t finish your house as he’s run out of inches, or a brewer saying he can’t brew any more beer as he’s run out of gallons.

That’s what George Osborne is telling us when he talks about austerity: we can’t build for our future, he says, because all of the financial feet and inches have been used up somewhere else.

If you think that money is a limited resource, then tell me: how come the government created £375 billion worth of the stuff as Quantitative Easing?

That’s the equivalent of £10,000 for every man, woman and child in the UK. Where did all that money go?

Steve Keen, one of the few economists to predict the financial crash of 2008, talks of “Quantitative Easing for the people”.

He says that the government should use the capacity to create money, but that they should give it to us.

If you are in debt, he says, you should use the money to pay down the debt. If you are in credit, you should spend it.

Give money to a rich person, and they will put it into an offshore account, thus withholding it from the economy.

Give it to an ordinary person, on the other hand, and they would probably spend it. They would buy a new three-piece suite, or a new kitchen. They would go on holiday. They would buy a new car.

Spending money creates jobs which gives more people money to spend. The money goes round and round and the economy grows.

Positive Money have estimated that of every pound of that £375 billion created by the Bank of England and given to the banks, only 8p went into the real economy.

If, on the other hand, they had given it to us, every pound would have generated £2.80 worth of economic activity and everyone would have been better off.

The Whitstable Gazette.
The editor welcomes letters on any topical subject, but reserves the right to edit them. Letters must include your name and address even when emailed and a daytime telephone number.
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For a fully referenced version of this article please go to https://christopherjamesstone.wordpress.com/2016/01/29/quantitative-easing-for-the-people-2/

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