130930 talk Sarah "Why is there so much debt" 30th Sep

 

Date	30/09/2013	Presenter	Sarah
Time	<19:30 - 21:00>	Secretaries	Peter
Location	Quaker Meeting House	Type of meeting	Talk
Attendees	13 people present, including a handful of new or recent members

 

Table of Contents

 

Campaign Update Talk Discussion

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Campaign Update

There have been 30 new names added to the mailing list since the last meetup. Peter talked briefly about a number of recent events

• Showing of the film "97% owned"
• Transition event - numerous Sheffield campaign groups came together for a workshop
• Stalls at the Green Fair, and outside the Town Hall. This is something we need to do more of
• Green Party conference - has adopted monetary reform as part of their economic policy. See green-party-motion-to-end-fractional-reserve-banking

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Talk

Sarah gave a back-to-basics talk entitled "Why is there so much debt". She first showed two videos from the Positive Money website

• 10-year old girl explains where money comes from
• Why is there so much debt 

 

She then gave a presentation including

• clarification of how banks create money, and the damage caused by our monetary system
• objectives of the Positive Money campaign
• local strategy and focus 

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Discussion

Following (and during) the talk, we had a lively debate about some of the issues raised. I have captured just a few of the points below - apologies to those who raised points that I haven't captured.

 

In a growing economy, is debt a problem?

We had discussed this at a previous meetup and concluded that borrowing money at interest is sometimes justified, but not always. (See 130325 Meetup 25th Mar )

 

Can't explain it to others

A lot of people have false ideas of what banks do, and are unable (or unwilling) to take it in when we try to explain it. Several people said it takes 3-6 months for it to sink in. [Peter plans to have a session on this at a future meetup]

 

One of PM's objectives is "to reduce the burden of Govt debt", but they also say it's not such a big problem as the politicians make out.

There was a lot of misunderstanding about what the "National Debt" is - does it mean Govt borrowing? Is it borrowed internally or from overseas? Is it the same as the balance of payments deficit? We could do with a session on this at a future meetup.

 

[Note : Wikipedia makes it clear that "National Debt" = Govt borrowing (also called the Public Sector Borrowing Requirement PSBR). See http://en.wikipedia.org/wiki/National_debt

See also Appendix II in Modernising Money ]

 

We just need stronger regulation of the banks

We used to have stronger regulation, but it was progressively removed. The same would happen again

Stronger regulation would not have stopped the recession - you can't regulate to make banks lend when they know it is risky - their duty is to make a profit for their shareholders.

 

You can't just blame the banks

PM is a monetary reform campaign, not just a banking reform campaign. It's the system of relying on bank credit for our money that is the problem. Banks are part of the system and part of the problem, but they are only doing what comes naturally to them - profitting from the system

 

Is the Positive Money solution the same as Quantitative Easing?

Yes, in that both involve the Bank of England creating "new money". But the way new money would be created and injected into the economy would be totally different. QE benefits the financial sector, PM would benefit the real economy

 

People would be suspicious of the Govt creating money.

A lot of people would not accept the reforms, as they don't trust the government.

It was pointed out that it would not be the government in control of the money supply, it would be the Bank of England under tight conditions of transparency and accountability.

 

Should Positive Money align with the Green Party?

No - it is, and must always be, a non-party political campaign. The Green Party is aligning with Positive Money, but PM embraces a wide range of political views.