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1. all PERSONAL DEBTS in International (Pounds) money are are wiped from the banking system and all credits are converted to Engros on a balance multiplied by 2 basis.

2. All BUSINESS DEBTS in Pound-type-money are wiped from the banking system and credits remain as Pounds, again, multiplied by 2.

3. All Existing Cash under the mattress will be exchangeable for twice as many Engros (as the paper Pound will disappear – business should have no use for cash in a modern society).

4. All government bond debts are similarly cancelled. All government bond holders receive bond-value x 2 in International Money of whatever denomination (every country simply prints it in effect).

5. Charging and receiving interest on Engros is outlawed as usury.

6. Seizing Engros to pay business interest or loans would also be outlawed.

7. Charging and receiving interest on Pounds is left to the “free market”.

8. All shares on all exchanges remain in whatever International Money they are held in.

9. Internal exchange rates for Engro to Pounds are set by government and are envisaged to be extremely stable.

10. All increases in the internal money supply in Engros is routed through the population in the form of:

11. Introduction of the National-Income for EVERY legal citizen in the country with special rules and conditions and protection for under 18s, pensioners and the certifiably unable to work. The first payment to be made (or made available in cash) on debt jubilee day requiring the override proviso being that you MUST be “working” or in work as the payments will be made via your employer (see later explanation):

12. Scrapping of all benefits/tax credits etc for those able to work.

13. Governments supplying direct credit or loans (in Pounds or Engros) to business and especially banks is also outlawed.

14. All Paper Pounds & coins are withdrawn from circulation during a set period until:

15. Engro to Pounds conversion is only available via government owned banks.

16. A new taxation system is introduced. There would only be 2 taxes. a) VAT. b) Engro / Pound Exchange tax.

17. For international import businesses selling locally taxation would occur at the point where Engros are exchanged for Pounds (for use in buying more imports). For international businesses exporting goods and receiving payment in either Pounds or another currency, corporate taxation would effectively be zero at that point, encouraging export over import. For local businesses taxation would be via “differential VAT”(not explained here). Improving tax take and encouraging smaller businesses. Taxation occurs on wages that are paid by using Pounds as the source when they are converted by the company to Engros. Taxation on pure Engro wages are not taxed at source but through VAT.

     

As a pleb with a pocket calculator I can work out that our current growth-to-survive and money systems will fail within about 30-50 years. We are hitting the top end of an exponential rising curve, the part where it literally starts going straight up.

See this for an idea of the increases recently

We are still told that we need world wide growth to solve the recession problem. Europe has just allocated nearly 1Trillion Euros to “lend” to EU countries. The US needs even more trillions to keep going. All over the world every country is saying “we must export more to solve the debt problem” Who to? Is the pertinent question. Who is going to buy all these products?

The start of the answer to the question has to be a personal, national and international Debt Jubilee or Global Default on loans if you prefer. Currently money is out of control, there is not enough money neither will there ever BE enough money to repay all these trillions of global debt. There is of course a downside to global debt default when using current thinking - it would wipe out our banking systems and our means of paying for everything, even water, food and heat the necessities for life.

So a controlled way has to be found

“Personal / internal” (The Engro/Scotro.Welshro/Frenchro/Greecero, Amero) money and “business / Investment” (The Pound, The Euro, The Dollar etc.) money separation. For this discussion I will use the Engro and the Pound.

The debt jubilee has to coincide with the introduction of something like the Engro and the removal from commercial banks of the ability to create the local Engro money that is used for general trading within a countries borders This right should return to government owned central banks who can create debt free Engros i.e. it does not have to be borrowed into existence and they never have to be paid back except as taxes. It is simply created and credited to accounts as needed. I think this used to be called “the money supply” and was controlled to avoid the situation that we have now. The Engro would be exchangeable for The Pound only (International business money). Which are exchangeable for Euros/Dollars etc.

Tomorrow: Inside a country on the Debt Jubilee Day (DJD) must award it an acronym :).

>>But governments don’t set themselves the objective of actually repaying public >>debt - they are merely concerned to maintain its manageability

I assume you mean “revolving debt” on a national basis, what us in Pocket Calculator world would call Credit Card Debt. You pay some off but then by the end of the month you spend it again. Hence you keep paying the interest on a fixed sum - and that is what has to stay manageable - Paying chunks of national wonga to our bond holders, read banks, insurance companies, pension funds and foreign investors.

By the time you have six credit card you are suffering badly!! I know I’ve been there.

This has to stop at some point. So we should be asking our new government - What’s the plan to get out from under the debt yoke?

We all know that if you make the minimum payments on a large credit card debt, you will be paying for ever - which is what the card company / bond markets/ foreign investors want. UK plc has to find  a faster, better way of repayment not continue paying the interest ad infinitum!

What is that way? In the past we would have said - “Growth” - simple arithmetic again - stimulate the economy - create more taxpayers - get higher income - pay off some debt. Have a little bit of inflation because that helps reduce the burden of the debt over time too.

Today there are a few problems to say the least…

Our industries have been decimated, let’s not kid ourselves, they were never fantastic except perhaps in the distant past, and even then we relied on cheap materials and extraction from the Empire. It was not really a fantastic feat was it? We had a third of the world, strictly controlled, often beaten into submission, as a resource funnelled into a tiny island. Well, forgive me, hardly difficult to make few bob was it.

Those are the times that we have been made to pay for, we the “Great British” gave every one of those “common wealth” peoples a right to live in blighty and a claim on our future. What could go wrong? We ruled the waves and the economy of the world! AND we are “Great”…

What went wrong, we all know, the world changed and we tried not to. We still want to play in the big boys playground, but we are diminished, shrunk, a raggety band of pen pushing paper shufflers collecting a few fees for said scribbling and shuffling. Bolstered by our arrogance and our wallowing in our past “glories”.

What industry we do have is not ours. We have paid the credit card bills by selling our furniture and worse we are now down to selling our tools - the tools we use to make a living, few it seems are left.

The rest of he world must look on and chuckle. “Great” Britain, hmm.. since when.. “special” relationships, hmm…here boy…  Sort-of part of Europe when it suits them, hmmm..grumble, grumble, Saves the world…hmm.. The Great British working mans spirit and ingenuity, hmmm.. half mostly employed ingeniously getting the tv to get free channels and to calculate the cheapest beers at the super market per % alcohol…hmmm… Saves the world again! hmm..

We need to start saving ourselves. We need a new attitude. We need to firstly realise that the economic restraint and prudence that we preach at others actually applies to us too. The free ride and credit rating, granted by the rest of the world due to our history is over. We have never defaulted on our debt. No, we always pay up! we are the Great Brits, whatever are you thinking! Well, maybe we should… The business world is tough world they say - and this is business of the most serious order. One sting is all we need. Deep deep doo-doo would result but hey we will only have the Great British Pound for so much longer, so why not send it off with a bang. Not his terminal cancerous decline.

If you don’t fancy that well, what do we have left, apart from paper shuffling?

Brains, Science, inventors and oh yes, that ingenuity.

Brown is right on one thing only in my mind - Investment. Investment is what we need. So where are the opportunities in this changed world?

Energy.

Energy drives everything, and in todays world that means oil. But spot the problem… oil has been done, and is done for eventually. So what takes its place? Renewable/sustainable energy  technology and energy frugalism. That’s what. There is ultimately no other answer. That is where we need to be. While the rest of the world bickers over degrees of co2 and smokestack emmissions, we should be beavering as if it is the beginning of world war 2 and we need Radar, Spitfires and Hurricanes. We just don’t know we need them, we don’t know what they are yet, but know we will need them. So we should beaver rapidly to discover what these future things will be.

In an earlier post - hat tip DevilsIntheDetail We see how continued 3% growth adds 30% to GDP in 10 years. If we do the same sums for the DECLINE of oil we end up over 20% down in the opposite direction. Giving a 50% gap between available energy and required national output. So it can’t be done. It’s not achievable! As our new incoming prime minister will probably be told in a few days time. At which point he will instantly age 10 years - it happens to every new prime minister! He now knows he is driving a piffling force (the UK economy) into an immovable object (the peak oil problem). It’s no wonder these poor guys end up with short term aims - the long term aim is just too difficult to contemplate.

So THIS IS the most important election for centuries. Our new prime minister needs to turn the wheels of the economy and point them NOT at growth, but directly at energy investment, energy research and energy saving and distriution technology. We don’t need shiny electric cars and other such showcase items, don’t waste effort and money on glitzy consumables we need future things, solid lasting things.

ENERGY not BANKING is the future. We need to use the dregs of our credit card limits to set this up.  We need to use the unemployed/economically inactive to insulate every state building. We need to nationalise our energy grid and suppliers. Stop the stupid competing and lining the pockets of foreign share holders.  Re-align the industry to point it directly at the future. Use the “profits” to create small scale feed-ins and community projects. All state owned, this time with the remit to be actually for the people, not for profit.

It IS an emergency as big as a war! So we get kicked out of the E.U. for doing it, ho hum they’ll be back (a little arrogance is not necessarily bad).

If we do not do this - we will freeze to death in the dark in the not too distant future. There are good people here, clever people. We need to stop beating on them and support them. We need bold steps.

Oops, seem to have rambled.

I rambled so much that the  BBC closed the comments before I could post it

The (only just still current) government’s highest forecast for growth = 3-4%.
Lets say 3% growth for 10 years.

Current GDP is Circa £1.5 trillion 10 years growth at 3% results in GDP of £2.015 Trillion in 2020, a real increase of nearly one third or 515 Billion over 10 years. So lets go forward 10 years and apply Taxation to this increase in productivity at current base levels (approx. 38%).

This gives us £195 Billion extra income to the exchequer in the 10th year. (With a lot of luck and a lot of hard working taxpayers and a lot of export profits.) I realise taxed Company earnings/profits, VAT and duties and other taxes raise more but I’m assuming we need those to run the rest of the country not just pay debts. So lets just say that is it, in simplistic taxpayer terms.

The deficits for the next few years are going to be horrendous, it is estimated at about 170 billion for year 1. Add Interest at current Guilt yields of 4% ish and in 10 years time we have paid interest of 68 billion on the original 170 billion. Total 238 Billion.

So in the 10th year, all the taxpayers additional earnings can’t pay back all of what we borrowed in year 1 So reversing the sum what we really need in 10 years time (to pay back year 1) is 238/38*100 = 626 Billion in Growth which is 3.5% Growth - hence the chancellor’s 3.5% forecast to keep the markets happy until after the election. When they will admit this is highly unlikely and revert to half from growth and half from taxation & cuts. Simples.

To put this in context: There are around 32 million tax payers. So over 10 years the taxpayers have to increase their output (earnings) by 515,000 / 32 = £16,100 each which is £1,600 per year on average. OR they have to be taxed that much extra. And that figure is (given an average earnings figure of 26,000) 6% extra starting now! I don’t see the growth (0.00x% gets us absolutely nowhere!) So tax it is then.

We are really really going to struggle to pay this off.

Getting back on topic and to the point, Greece has a population of approx 12 million. At the same ratio as us they have approx. 6 million taxpayers. They have just borrowed 100 billion Euros ish at 5%. Their GDP is currently around 350 Billion Euros…. They think they are going to pay that back with cuts? It seems to me they need 4% growth just to pay the interest and 7% to repay the capital at 10 billion per year( over 10 years) that’s 11%. But they are saying 4 years? Greece must go bust.

I am but a lowly pleb with a calculator, so someone, possible a master of the universe, tell me what is wrong with my calculations?

In my personal view, national and international “Debt Jubilee” - is starting to look like the only way.

Update 6th May:

It looks like Martin Wolf agrees with me

If you are concerned about what happens when you give a few people a lot of money and few rules - you should read this article on counterpunch

nuff said.

More sense from politicians! Twice in two days - I’ll need time to recover.

See BBC news Today

I see nef have given this a cheer too on their blog

Not been any time for blog writing this week or month! my apologies to my subscriber - Indeed I have just one! (thank you!). So I am encouraged to write something new.
I see that other voices are taking up one of my (not unique) ideas to turn the Post Office network into something we, the people, can use. See this post on nefs Triple Crunch Blog

Also no supported by Peter Mandelson as out lined here on BBC News

There are parts of the wordpress editor missing today I am actually having to write this in pure html - no additional tools seem to be available or work so I will give up for tonight and try again tomorrow.

I’ll try to get a new page of the book done too! Otherwsie it will take a literal year of Sundays

Today I posted my first comment to someone else’s blog concerning the proposed windfall tax on energy. I mostly just think about posting,  I’m getting brave!

But the shilly-shallying of these massive (Non-UK) companies when it comes to their social responsibilities makes my blood boil! In essence I say to the government - Give them an ultimatum - voluntarily help those in need or pay the tax! I also say that a voluntary agreement would be more likely if these companies, that are vital to the nations well being, were actually still owned in the UK.

I don’t know if these Spanish, French and German companies are going to be asked to help their own domestic customers in the same way, but if that is likely is is also not likely that they would take the line “charity begins at home”. It raises another point in my mind - if we are all a jolly-joined-up caring Eurpean Community isn’t the UK “home” too?

As a country we have bought a very expensive bank! What should we do with it? Bail it out and then turn it over to the private bankers again? No. Let’s USE IT.

Conversely, for us as a country there is a lot of money to be SAVED here! How? well How about this for an idea:

We know that banks make money by charging the businesses that accept your payments, whether by card or cash. Why do we allow them to make money on all the benefits, tax credits and unemployment money we pay out?

If there are say 1,500,000 people receiving benefits why is that we allow chunks to be taken out of this by private banks? Lets work it through:

1,500,000 people who receive for the sake of argument, £100.00 each week. This money is deposited automatically by the Government into peoples bank accounts. At my low estimate that is 150 Million pounds ( £150,000,000 ) per week or 7.8 Billion (£7,800,000,000) a year being deposited that gets under the control of commercial banks, and we know what they do with it. Plus many of the people receiving benefit are on the borderline between credit and debit most of the time. They will probably be incurring interest on overdrafts and charges when, in desperation or panic, they make payments that they can’t afford. And I expect the banks are charging us, via the government for paying all the amounts each week. Lets say it is just 10p per transfer or payment that would amount to £7,800,000 per year just for making the payments!

I believe that we can use Northern Rock (Our New “Civic Bank”) to massively reduce the costs to society of the administration of the benefit system and help us to control the money we using to support those in need. If we use Northern Rock as the “Civic face” of the Bank of England (effectively what it is now) we can benefit in the following ways:

• By issuing a “civic debit card” we bring the benefits system in to the 21^st Century.

• By issuing a “civic debit card” to people receiving benefits instead of hard cash or transfers to commercial banks we reduce costs.

• Reduced and easier access to “emergency money” by people in short term money trouble.

• This emergency money to be Interest free.

• The ability to recover the short term emergency money loans by automatically debiting a weekly amount (that is agreed to be affordable) to the persons civic debit card account.

• Reduced cost for the applicants - no need to travel to make an enquiry – can be done by phone.

• Reduced interest paid by credit-borderline people.

• No charges on accounts for credit-borderline people.

• Reduced expense for the country by keeping these charges down (after all we probably end up paying them)

• Reduced benefit fraud – the civic bank will know how and where the money is being spent so unusual or strange spending will be investigated. (The credit card companies and banks already do this.)

• Proper realistic interest rates paid on money kept in the civic card account encouraging saving.

• Reduced fraud in applications for benefit and distribution.

• Less threat to DHSS staff – there is no actual cash on the premises.

• Having the cards will carry no stigma.

• No other bank account necessary to hold a civic debit card.

• Limited Cash withdrawal so benefit spending can be tracked.

• Options for unwell and/or addicted people on benefits to restrict their card voluntarily for instance so they cannot buy alcohol or cigarettes.

• Particular people could benefit from a different form of card – a “Civic Pride Card” these would be issued to people who have given or lost something or someone for the benefit of our society or it aims. Particular instances come to mind:

  • The remaining partner of a member of the armed forces killed in combat

  • The remaining partner of a member of the police service killed in the line of duty.

  • People elected by the Queen or the People to receive a Civic Pride card.

  • Injured and disabled services personnel themselves injured in the line of duty.

  • Civic Pride cards are a lifelong entitlement to an agreed and indexed sum per year or month– the recipients’ service being considered “beyond price”. We should not quibble or be reticent about honouring those who give so much.

 

• The civic bank will cover its costs by investing the unspent money in the civic card accounts – it can do this profitably and competitively because the money source will be cost-free. It will not be permitted to lend money it has not got – no leveraging/gambling with the country’s assets!

• The civic bank will cover its costs by participating in the current per transaction card charging scheme.

• Reduced cost of living by negotiating with large regional supermarkets for the best discount for food and essential goods charged to the civic card.

• Accessibility – Northern Rock to take over the existing Post Office network scheduled for closure. Providing those vital services where they are needed – not where commercial banks think they would be most profitable.

• Could double as an ID card – covering the costs of the ID card scheme using commercial practices.

• Civic cards for pensioners. More transaction coats saved and as pensioners tend to be better savers, more deposits for the civic bank.

• Civic cards available to all not just those on benefits.

• “Untied” cards available for asylum seekers and refugees. With a limited life span. (3 Month temporary permit? 3 month civic card.) With use restricted to essential purchases. To extend it or receive a new one we want to know where you are and what you are doing.

The uses for such a system go on and on. The possibilities are almost endless once such a card was established and in use.

There will be fraud of course, but there always will be, no matter what the system.

Is this the way we want OUR bank run

clipped from www.theyworkforyou.com Vincent Cable (Deputy Party Leader; Twickenham, Liberal Democrat) Link to this | Hansard source | Watch this That is a helpful correction. However, the point in answer to both Mr. Redwood and Mr. Jones is that we now know that over the past few months the Northern Rock management has refused to accept any individual voluntary arrangements. Northern Rock is the only bank that has refused to do that. It is clearly worried about the security of the people who have been lent to. There have been complaints from the Insolvency Service that that is bad practice and against policy. Northern Rock is the only bank that is taking that extremely aggressive approach towards the people who have borrowed from it, as it is worried about conditions such as those described by the right hon. Member for Wokingham.