Trapped in a game of "Simon Says..."

So how's it all going?

Interest rates are going up.

Taxes are rising.

Prices are rising.

The school buildings aren't getting repaired.

The hospital roof is near collapsing.

And what have we got to show for it? Apparently, the markets are not as 'spooked' as they were and our grandchildren won't have to pay back our 'national debt'.

Yes, but what have we actually got to show for it?

Why are we so concerned not to spook the markets?

Which is better from the following two choices...?

• Economic collapse, mass unemployment, rising home repossessions and millions turning to foodbanks.
• Spooked markets.

Would you risk a bit of market spooking to avoid the first list? After all, what does a spooked market actually lead to? And why is it bad? And is it as bad as the first list of catastophes?

Because if a spooked market might lead to the first list of catastrophes, then isn't it a risk worth taking to avoid definitely causing all that pain and misery?

Simon Says

Otherwise, we're trapped in a game of "Simon Says...".

Anything that might 'spook' the market has to be avoided.

So the market says you've got to have austerity...

 -- great, let's cut everything to the bone, then start to starve people.

The market says interest rates have to go up...

-- fantastic, let's force businesses to go bust and people to lose their homes.

The market says we know best about pricing

-- brilliant, we're sure you won't engage in any price gouging.

Alternatively, we could actually try to repair the country and ignore the fact that 'Simon' is telling us to punch ourselves in the faces. Do you see 'Simon' punching himself in the face? Do you? As whatsisface said in Shrek over twenty years ago, "Some of you may die, but it's a sacrifice I am willing to make."

National Debt

This is an imaginary construct that has been around for hundreds of years. We owe it to ourselves because the government owns the Bank of England. It hasn't been repaid and probably never will be. Suggesting our grandchildren will be repaying it is an absolute pile of piffle.

Money

Because, after all, what is money? It's an imaginary construct too.

When the government wants to spend money, it does not have to raise tax to do so. It literally asks the Bank of England to create it from thin air.

In order to make sure we don't have too much money, which actually could lead to inflation, some of it is recalled and destroyed. This is known as tax. So the best way to reduce inflation is to increase tax because that will actually, literally, really take money out of the system.

When you go to the bank for a loan, they don't give you money that someone else has deposited. They literally create the money out of thin air. And, when you repay it, that money no longer exists. Ah, but the interest still exists -- and that's where the bank's profit comes. It has created something from nothing, and charged you for giving you the result of the magic trick. Must be nice, running a bank...

So, when interest rates go up, money is taken out of the system, sort of, except it isn't really. You're poorer and the bank has earned more money.

Effectively, it's like taxes have gone up except, rather than taking money out of the system to effectively counter inflation, money has been taken out of the wallets of 'normal' people and moved into the profits of banks, where it will potentially be moved off-shore in order to be tax efficient.

Overall

The government is using a variety of crises to pump up the profits of banks and multinationals, to downgrade the health and education services to encourage people to lose faith and pay for private treatment, and as an excuse to deregulate various industries in order to reduce the responsibilities of large companies to respect and look after the country in which we all live.

Have a nice weekend.