Title: Monetary Reform (MR)

Proposer: Ben Dyson UK member International Simultaneous Policy Organisation (simpol) http:// www.simpol.org.uk

ben@bendyson.com

Background:

All the money in your bank account was created by private companies. Through a loophole in the law and some clever accounting these companies (commonly known as banks) create new money whenever they make a loan. This means that every pound or dollar in your bank account was created when someone went into debt. For every £1 in your account someone else has to be £1 in debt. If you want to get out of debt someone else must sink further into debt. This system of banking is used in nearly every country in the world. It explains the huge levels of debt affecting every country and effectively subsidizes the banking sector at the expense of ordinary people and businesses.

Proposal Summary:
1. Private banks should be prohibited from creating new money when they make loans (and via any other accounting process).
2. The central bank should create any new money that is needed in the economy and give this as a debt-free grant to the government.
3. The government will be able to spend this newly created money in accordance with its democratic mandate (for example reducing taxes increasing public spending or making direct payments to citizens)
4. The decision over how much money should be created should be taken by a committee that is completely separate and insulated from the elected government.
5. Banks will be able to continue making loans but only with money that depositors have handed over to the bank specifically for the purposes of lending and investing.
Customers who wish for their money to be invested will put it into an Investment Account and lose access to it for the duration of the investment.
6. People who wish to keep their money 100% safe will be able to keep it in a separate type of account (a Transaction Account) where the bank will be unable to lend it.

Why can’t this policy be implemented by a government acting alone?

Call for Reform have made a strong case why UK MR via the Bank of England Act could be implemented without causing a nation any economic competitive disadvantage.
However the Act may find resistance especially from vested interest which may slow its national implementation. Also once a critical mass of support for M.R. had been achieved in the UK via Call for Reform the call for MR in many other countries is also likely to be in full swing. This need will be exemplified as the global debt crisis deepens.

http://www.BankofEnglandAct.co.uk/
http://www.bendyson.com/