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Economic reform proposals; three from colleagues in America, Japan and Britain

July 18, 2017

Which approach would have been supported by Thomas Attwood, who advocated participatory democracy, strengthening of regional economies and economic and monetary reform? An amalgam of all three?

Ellen Brown reminds us, in her latest article, that ancient civilizations celebrated a changing of the guard with widespread debt cancellation:

“It is time for a twenty-first century jubilee from the crippling debts of governments, which could then work on generating some debt relief for their citizens”.

She advocates an alternative to sovereign debt (aka national debt, the amount of money that a country’s government has borrowed). Her model: the Bank of Japan’s quantitative easing programme which has enabled it to buy 40% of its government’s debt, an ongoing process, creating an interest-free debt ‘owed to oneself’ – the accounting equivalent of a debt cancellation. Gross interest payments on Britain’s central government debt are projected to be £48 billion for 2016/17, according to the Treasury. Ellen would approve the government’s repayment of almost a quarter of the debt owned by the Bank of England, which pays the profit back to the Treasury and call for more to be done.

A reader living in Tokyo responded to her article:

“I don’t really agree with her assessment. Basically she says “Look Japan is printing free money and has no inflation that everyone worries about so why shouldn’t everyone do it?” He points out that, as happens in Britain, all the money being printed is going into the hands of a relatively few extremely wealthy people; no inflation is created because these people don’t need to buy more household goods and the money goes into the stock market which has ballooned.

He adds sardonically that the attitude is, “So yes – feel free to print as much money as you like, but only as long as you don’t give it to people who need it”.

 Canadian/American Elon Musk advocates a universal basic income:

And British economists (Finance for the Future) advocate ‘repurchasing debt like Ellen Brown’ in their proposal for ‘green quantitative easing’ set out in this detailed report (right).

MP Caroline Lucas has also been proposing this route to rebuilding our economy, tackling climate change, and providing decent long terms jobs in every city, town and village across the UK. She writes about Green Infrastructure Quantitative Easing (GIQE), a concept first proposed by the Green New Deal Group. This would be an investment in a positive green and socially just future. It could:

  • train and employ a nation-wide ‘carbon army’ which army would make all of the UK’s 30 million buildings energy efficient, and, where feasible, fitted with solar panels, reducing energy bills and fuel poverty, cutting greenhouse gas emission and dependence on imported energy,
  • take steps to make the country more resilient to flooding,
  • finance the construction of affordable highly energy efficient housing, built predominantly on brownfield sites
  • and help to fund improved regional public transport networks to help revitalise local and regional economies.

After detailed costings, Ms Lucas continues: “The actual mechanism is relatively straightforward. The Bank of England would e-print tens of billions of pounds annually, as it did during the last round of QE, and a considerably enlarged publicly owned Green Investment Bank (GIB) would issue investment bonds to be bought by this QE programme. This would effectively leave the money required to fund green investment both debt and interest free, in the hands of the Green Investment Bank (GIB)[iii], to be invested over a realistic time scales and so be non-inflationary”.

Mark Carney, the Governor of the Bank of England, confirmed that the “Green New Deal” is technically possible. In a letter to Caroline Lucas he said that, if the government requested it, the next round of QE could be used to buy assets other than government debt – clearing the way for this sort of green infrastructure programme. And a cautious appraisal of the case for central banks prioritising green assets over regular ones in their purchasing policies was made in May’s Financial Times, by economist Alexander Barkawi, founder-director of the Council on Economic Policies.





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