With Greece almost defaulting on their sovereign debt many people are blaming the people and their excesses for the nation’s problems.  Early retirement, high wages, pensions and tax evasions, the mainstream media is quick to point these things out.  Many western nations are in the same sinking boat as Greece.  Spain and Portugal had their credit ratings reduced.  The UK has an even greater deficit than Greece.  Ireland is on the ropes.  The United States is raking up huge deficits while job losses and foreclosures continue to mount.  The “so called” economic experts are saying that austerity measures are needed by western governments to save the world from a collapse of the economic system.    Massive government cuts need to be made- they say . The time of the free lunch is over they quip. 

 This type of rhetoric is completely disturbing to me considering it is the economic system itself that is designed to lead to austerity.   It is designed to channel wealth to the top 1% and to destroy the middle class.  These economic experts are idiots.  For instance Greece accepting the economic austerity measures in order to get bailout money would have to make massive cuts that would leave 1/3 of the country without jobs.  These were well paying middle class jobs.  Right there you would have 1/3 of the population joining the lower classes.  There would be no paying back bailout money with a lower class that big.  There would be no real wealth in that nation generated with 1/3 of the country losing jobs especially with 1/3 of the people not working and not producing wealth for the nation.  It would do nothing for Greece except to keep it poor.

The only people getting a free lunch are private bankers.  Western nations are not sovereign because they borrow money from private bankers at interest.  Greece used money issued to them as debt to fund their needs at interest.   For every dollar these banks have, they are allowed to lend out at least ten times that amount, this is called fractional reserve banking.  But instead of lending out to fund industry and to stimulate the economy, they choose to gamble it away with wild speculation, only to be bailed out by government through the looting of the people.   

This is what every so called 'sovereign' western nation does. Borrow money from private bankers at interest that can easily be raised and eat up budgets while the banks use money created out of thin air to gamble and speculate.  This idea is absolutely ludicrous.   At the same time nations have opened themselves up to free trade and have seen their domestic industries obliterated.  Cheap consumer goods have made it hard for domestic industry to compete with international markets.  Jobs have been outsourced, resources bought by transnational corporations.  Because of free trade policies, wealth has been transferred out of nations into the pockets of corporations, while domestic economies have suffered.   

These two things have looted the wealth of the people and have made the collapse of the economic system imminent.   This is what the system was designed to do - Create a neo-feudalistic world elite oligarchy and then the lower class masses.  Don’t listen to the economic experts who preach austerity.  Austerity measures are the product of this current economic system, it is the measure that is needed to save this parasitic system.  Why save it when we could get rid of it and adopt one where nations are truly sovereign? 

In order to be sovereign:

#1) A nation's central bank should not be privately owned like the Federal Reserve.  It should not be privately owned like the EU central bank, or the IMF, World Bank, or the BIS.  A nation’s central bank should be owned by the people and for the people.   Money should not be created by private banks through fractional reserve banking.  This money rarely goes to fund domestic industries, and when it does it is issued as debt with high interest attached.  More often than not it goes to speculation, which does not represent real wealth.  It is money created out of thin air for the purpose of gambling.  Instead the power to create money should be with parliament or congress through the nationalized central bank owned by the people for the sole purpose of funding infrastructure and development at little or no interest.   This money will be backed by industry and productivity, and therefore, is neither inflationary nor deflationary. It is spent into existence rather than loaned into existence.  This central bank could lend to cities and municipalities to fund  infrastructure needs as well.   

#2) A policy of protectionism needs to be in place to encourage domestic industry, and the protection of natural resources from foreign ownership.    This is how America, Canada and many western nations became industrial powerhouses.   A policy of protectionism will protect domestic industry from competing with cheap goods from nations that pay their workers next to nothing in sweatshop conditions.   It will keep wealth from being channeled into foreign markets.  It will keep the wealth at home in a thriving domestic economy. 

Canada used to have a similar system.  This is how we became a “have” nation.  But with free trade and the privatization of our banking system, we are on pace to be like Greece.  At some point we will have to make drastic cuts in all areas of life that will affect everybody.  All of the western world will have to do this, unless we can adopt the “American system” proposed by Henry C. Carey, chief economic advisor to Abraham Lincoln.  It was Lincoln’s green backs:  government issued credit that changed America from an insolvent country devastated by a civil war into an industrial giant.  It is what got Lincoln assassinated.  Government issued credit through our own national bank; the Bank of Canada is what built our railway.  It is what funded our health care system.  It is what paid for our World War 2 effort with minimal debt.  It is what paid for our prosperity before we adopted the globalization model and the use of the private banking system.   So do not listen to these austerity arguments about how everything needs to be cut.   The economic system needs to be changed.  Let these bad private banks go bankrupt.  In theory it is not the people that are bankrupt but the banks.  The people have unlimited wealth; government issued credit backed by nothing except the faith, labour and productivity of the people issued at zero interest that can fund industry, create jobs, and a high standard of living.  Protectionism will protect these domestic industries.   It’s time for the transnational corporations and international banking cartels to be informed that there will be no more free lunch.

-Jens 

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