“.. debating the stages of decline may be a waste of time — it is a precipitous and unexpected fall that should most concern policymakers and citizens … most imperial falls are associated with fiscal crises. Alarm bells should therefore be ringing very loudly indeed as the United States contemplates a deficit for 2010 of more than $1.5 trillion — about 11% of GDP, the biggest since World War II.”
It has become very popular among “alternative thinkers” in today’s times to theorize that a return to centralized, “public” banking is the solution to today’s woes with “private banks” controlling the monetary supply in countries like the US or Canada. Here might be something one of these people have said:
“.. if money is controlled by banks we will never be out of debt. Government needs to control the money supply, because when they do, throughout history, things always have fared better because there is no “profit” or interest to be paid freeing the people from the shackles of international bankers. Simple.”
Close but not quite. See, if we put the government in control of the money supply then effectively, we just made them into a central bank (which almost all countries in the world today have). It’s not the name, or who has the job, it’s the fact such a job does exist which exerts this control.
What we need is a more decentralized model of capital assets for direct trade and/or socialistic redistribution – whatever morality of use of it our nation will believe in. After all, the use of ‘printed money’ as a trade tool is hardly necessary with electronic accounts and transfers (which we will use regardless), so why not just turn to real physical assets, those you can hold and those you can warehouse, and trade smaller portions in electronic fully audited trade?
For example, there’s such a thing now as a “gold money” account. You own gold, but you can transact like a bank account electronically. Obviously the accounting requires that what you hold will go up or down depending on what you earned or owed but it’s asset-backed, rather than central-bank controlled. Banks can’t inflate food, can’t inflate gold, can inflate paper, so if the trade doesn’t involve paper (or it’s electronic dollar cousin) then you effectively cut the fraudster out.
America, the fragile empire
Here today, gone tomorrow — could the United States fall that fast?
By Niall Ferguson | February 28, 2010
For centuries, historians, political theorists, anthropologists and the public have tended to think about the political process in seasonal, cyclical terms. From Polybius to Paul Kennedy, from ancient Rome to imperial Britain, we discern a rhythm to history. Great powers, like great men, are born, rise, reign and then gradually wane. No matter whether civilizations decline culturally, economically or ecologically, their downfalls are protracted.
In the same way, the challenges that face the United States are often represented as slow-burning. It is the steady march of demographics — which is driving up the ratio of retirees to workers — not bad policy that condemns the public finances of the United States to sink deeper into the red. It is the inexorable growth of China’s economy, not American stagnation, that will make the gross domestic product of the People’s Republic larger than that of the United States by 2027. You can read the full article from Los Angeles Times.