Sacred Connections Scotland
The following appeared in the August 2002 issue of the “Prosperity” newsletter, Glasgow, Scotland
Emancipation from debt psychosis
James Gibb Stuart
Economics is the phony science of the twentieth century, a mumbo-jumbo of statistics, graphs and computer readouts, all slick and sophisticated from the outside, but internally diseased. For all their modern gadgetry and pretensions, economists are not problem-solvers. They would like to be, but are eternally denied that feeling of fulfillment because the illness forbids them to take their interpretative science back to first principles. The business of economics is money, and the most important thing about money is to understand the banking mystique within which it is created. Since orthodox economists cannot or will not address themselves to the fundamental aspects of this matter, the young and angry, will have to look for their own answers. They will find, if they look persistently enough, that it’s really very simple. Jobs are dependent upon monetary credit being available, and in an ideal economy the credit would be created in response to a social, industrial or other national need. But our present system is far from ideal. It operates under a protocol whereby virtually all money must be obtained as a debt from the bankers. The Government, in common – astonishingly – with private industry, borrows from banks and financial institutions, and what it borrows on an annual basis is known as the Public Sector Borrowing Requirement, or PSBR. But most Government Debt, unlike private debt, never gets effectively repaid. Though old maturing loans are continually being paid off, this is only accomplished by the continual commitment to new borrowing.
So yet another astonishing fact becomes readily apparent: The government – our government, our ‘representatives’ – borrow money at interest, just to pay back the money that has previously been borrowed. The economic theory known as ‘monetarism’ claimed that by ‘fiscal disciplines’ such as making cutbacks and drastically reducing public spending, it would be possible to reduce Government outlays to such an extent that borrowing would no longer be necessary! But under this system, even with privatisation and PFI, no one seriously believes the PSBR can be whittled away entirely. Every Chancellor’s financial strategy is usually to contain the borrowing at as low a level as possible. Learned economists nod their heads and accept it. ‘There is’, they say, ‘no alternative’. This is the stage at which the new student generation should get very angry. If we can conquer our environment, venture into space, and confidently predict that one day we will set foot upon the planets, why should the economists meekly confess that our own domestic economic problems are virtually insoluble? Is it because they have been pressured into assuming that a monopoly of credit-creation should always remain with the bankers? Or is it because they simply have never considered any other way? For this is what it’s all about: The banking system is creating as a debt, and charging out at interest, money which the State could create debt-free for the benefit of all.
We have no option now but to try and force our leaders to understand, accept and act on this fact, because a nation whose growth and expectations are subservient to the bankers’ debt payments, faces a future of economic decline, with a consequent loss of independence. And what crusading youth must appreciate, even if its elders are too weary to listen, is that there is absolutely no need for any decline. When expansion takes place through government-created debt-free money, there is no danger of overheating or inflation, if it’s done in a suitably measured manner. In fact, as explained in my book, The Money Bomb [available from Prosperity], inflation itself is a direct derivative of government debt. Once emancipated from debt psychosis, an economy’s limitations are bound only by its availability of manpower and its own physical resources.
It could abolish poverty and income tax, renew the housing stock and allow us to benefit from the fruits of our expanding technology. Surely a worthy cause to engross a whole generation of student crusaders!