Debt As Money
Posted by jonathanfryer on Tuesday, 25th September, 2007
The Gladstone Club could not have predicted that Northern Rock would turn out to be made of papier maché (ok, a little bit of poetic licence there), but this made last night’s seminar on Debt As Money at the National Liberal Club singularly timely. The basic thesis was that we have moved to a debt-based money system that is ultimately unsustainable and potentially disastrous, if confidence collapses. In 1946, when the Bank of England was nationalised, debt-free publicly-created money accounted for 46% of the money supply. Now this is down to a mere 3%. And of course, mortgage credit is the central pillar of this debt-based house of cards.
One speaker argued that the rot set in with the launch of Access and its slogan ‘take the waiting out of wanting’; personally, I think that was symptomatic rather than causative. But certainly we have got into an unhealthy situation in which easy credit has put tens of thousands of households at risk of bankruptcy and has countless others under stress. Yet is any of the main political parties really taking such issues seriously — including educating the public about the associated dangers?