The United Kingdom is drowning in debt. A radical plan how to get rid of the problem is proposed by the Cobden Center. If you find a flaw in the plan you will get £1,000 reward.
It is not the latest spam coming to your e-mail from the UK. It is a real plan that is endorsed by economists and politicians like the member of the British Parliament Steven Baker.
In just seven steps £850 billion magically appear in the system and allow the Great Britain to pay off the debt. You can get the details here and try your luck for the reward.
The plan starts with the government printing approx £850 billion in cash and injecting it directly into the vaults of the banks and into the checking accounts of individuals.
Wipe from the bank books all the demand-deposits/IOUs as banks would not owe you money anymore.
The banks don’t have to pay you anymore; they will suddenly be £850 billion better off.
The government can now get the money that the banks don’t have to pay back to the people and put it into Mutuals, which would then immediately pay off the national debt.
In the complicated world of the elitist politicians and economists this is not inflationary, as “the cash replaces the demand-deposit which acted as money”.
In my world view this is either the government monetizing the debt or the banks stealing the money from all checking accounts. So I asked the Man behind the plan directly.
The following is my exchange with MP Steven Baker:
MP Baker, Sir.
I am not your constituency but I have a real disagreement with the plan Toby and you present here.
Why do you have to do all the shenanigans in between when all your plan is doing is this:
“… the government printing approx £850 billion in cash…
…which would then immediately pay off the national debt…”
Why all these change of hands, smoke and mirrors?
Let’s say John in your constituency owes the government taxes (£1000). Let’s say you print £1000 and ship them to John’s safe from where they will go directly to Her Majesty’s Revenue and Customs.
Then you wipe off John’s tax liability and now John is suddenly £1000 better off. So the Gov can take £1000 from John and invest it in mutuals and pay off the debt.
Why? The government can just print £1000 and plug whatever hole they have around with them.
Why bother John? Why all this paperwork, shipping and handling.
In your bio you say “I value achievement over process and humanity over bureaucracy.”
However your plan, described here by Toby is just a bureaucratic waste of time in attempt to make monetizing the debt look better than just running the presses.
Steven Baker, MP:
First, “Steve” will do!
I understand why you make that criticism, but it is misplaced. The money supply, as properly understood is not changed by this reform which merely swaps credit money for paper money, creating no change to the money supply.
The national debt is paid off using the existing assets of banks. Those bank assets were created through credit expansion and it is therefore reasonable to require the banks to exchange them for cash, wiping out the credit money they created and stabilizing the money supply.
I am not going to contribute further on this thread. After all that has been written here in explanation, the next course of action is for interested readers to see Jesus Huerta de Soto’s “Money, Bank Credit and Economic Cycles” which is available here:
Since everyone at the Cobden Centre has other work to do and with regret, I am going to turn off comments on this post. Please read Huerta de Soto or Fisher’s “100% Money” for more information.
Yep! This is what you get from politicians. They are often too busy to talk to the regular folks. They also believe that people are just stupid and need to read more books instead of bothering them.
Politicians just like to brag about how they like to listen to the people. Mr. Baker even posted a reward asking people to express their thoughts on his plan. But when having to deal with regular folks who do not belong to the elitist circles politicians like MP Steven Baker get easily annoyed and get too busy to chat with ya all.
We the stupid people can be very annoying, but if you are not ready to deal with it – do not become a politician, Mr. Baker!