It is remarkable that the discourse in the 2017 Election is still essentially illiterate on Financial matters and the axiomatic relationship of debt to money, two sides to an Accounting identity.
Debt is an Asset to the bank, the more the Government or the Citizens are in debt the Richer is the bank and the less debt then the lower the assets of the Bank and the poorer or more properly less liquid, they are, that is there is less money available for bank customers to exchange their goods or to pay interest on loans or taxes, in any event.
Carol Quiggle stated it thus in Tragedy and Hope,
Money and Goods Are Different
”Thus, clearly, money and goods are not the same thing but are, on the contrary,
exactly opposite things. Most confusion in economic thinking arises from a failure to
recognize this fact. Goods are wealth which you have, while money is a claim on wealth which you do not have. Thus goods are an asset; money is a debt. If goods are wealth; money is not wealth, or negative wealth, or even anti-wealth. They always behave in opposite ways, just as they usually move in opposite directions. If the value of one goes up, the value of the other goes down, and in the same proportion.”
The Answer is to make sure that sufficient money is circulating and available in the economy for productive exchanges to take place and so that the necessaries of life and some of the luxuries can be circulated amongst communities.
There are no shortages of excellent websites now that have set out clearly how the current system works and its inherent weaknesses and vulnerabilities. The number of solutions relates to political choices and there is less agreement about those ideas.
The diagnosis of the present problems with the Banking system is what is important in this Election as where the problem is not properly diagnosed then the suggested remedies will be a shot in the dark.
merely discussions looking toward a readjustment of the factors which prevent them
The dollar. He notes that it is a variable. Why anyone should attempt, on this earth, to use a
variable as a measuring rod is so utterly absurd that he dismisses any serious
consideration of its use in his study of what should be done.
He also considers ‘price’ and ‘value’ and the fine-spun theories of philosophers and
economists who have attempted to surround these terms with the semblance of meaning.
These terms, like the monetary unit, may have had meaning to men in the past but they
not relevant to the things measured; and the measuring rod and the things, measured as if
they were stable, are all variables.
General Election 2017: Is Theresa May a ‘Red Tory’?
3 thoughts on “Finacial Illiteracy, The Blind Leading the Blind. National Debts, Defecits, Productivity or, Austerity and other shibboleth´s”