Milking The People, Part Three: Bank Profits First and Foremost

The logical solution to the Recession is for government to act in the interests of the people and print enough money to re-inflate the economy and SPEND it into circulation.

Why does government not do that? Why does it resort to the complexity of having banks create it, then borrowing it off banks, then repaying it later at interest?

For one thing, it is too simple and when things are simple people can understand what government is doing and when the people understand what government is doing, government cannot hide its cock-ups.

The main problem however is that there would be no profit for the banks and that would not do at all. Clearly our government believes the prospect of banks denied the opportunity to make a buck is too gruesome to contemplate. It would much prefer we face ruin than actually take very simple, logical steps to put matters right and end this fiasco.

What is it planning to do instead?

It plans to have the national bank print money, Good so far. Then all it has to do is spend the new money into circulation, right?

You’d think so wouldn’t you? Unfortunately it has no intention of doing that. Instead it will use that newly printed money to buy back some of those aforementioned bonds AT INTEREST from the banks.

The banks will then take the money they receive from government and LEND it into the economy by persuading you, me and business to borrow it at interest.

Get the difference. On the one hand the government prints a few billions and then spends it directly into the economy – debt and interest free – to rescue ailing business, put more spending power in the pockets of the consumer and so on.

On the other hand the government prints the money and gives it to the banks in exchange for some pieces of paper with "bond" written on them. The banks then lend it to ailing business and hard up consumers at interest – which is another way of saying it allows the consumer and business temporary hire of the money, provided it pays a rental charge for that temporary use.

In the end then, with government’s help, guess who will profit from our misery. The banks of course!

But did they not create that very misery in the first place?