HERE WE GO ROUND THE MULBERRY BUSH
Assalam.
How brainless old economics will continue to negatively impact on the poor. The nation is not only trapped by a fraudulent monetary system but hampered by dinosaur economics that does little to achieve policy aims.
A nation is suffering a pandemic economy. After layoffs and killing of street businesses a large number of people do not have money to buy things to survive. Magically some money must appear in peoples’ pockets so they can buy things to self start a decelerating economy.
It cannot come from borrowing because govt borrowing limits are already breached. In dinosaur economics banks lends from deposits and banks are not recognised as money creators. Economic story tellers also believe the nation must save before there can be new investments. The reality is investments will come when Banks’ Credit Committees feels their new loans are repayable. Being money creators they are the prime movers of the nation.
But this knowledge is not recognised by the economic advisers to the govt. Monetary reformers say just create the money Cr BNM Reserves Dr Govt operating accounts. The govt economists say no- they are livid this will create inflation.
So they say borrow the money from banks. What they have not learnt is that the banks will just create the money also and give it to the govt. Monetary reformers ask them why does this not create inflation when you say Cr BNM Reserves Dr Govt operating account will?! Aren’t the money going into the same economy? They cant answer! Their PhD did not cover that.
Then they say lets not do that but do Quantitative Easing instead – then there will be money in economy without borrowing. For those baffled by the phrase Quantitative Easing or QE it means nothing more than the govt again creating the money, but instead of going straight to govt coffers to give to rakyat to jump start economy- it goes to bondholders who sold their bonds to the govt.
So where is this new money now? Back in the banks not with the rakyat. Banks are now supposed to feel so flush with money they will lend to companies who will engage workers and who will pay workers wages who will now spend to jump start the economy. This is what their dinosaur economics textbook teaches them. Trickle down economics. What a long winded way to jump start an economy?! If at all it does! While waiting for this to happen the economy spins further in a Covid downward spiral taking along more and more human beings with it.
So can everybody now see what is wrong with the economy and what is wrong with the government of the nation?
We are bogged down by dinosaur knowledge and dinosaur systems. It takes brains and guts to change, but when a government does not understand the issue and do not have advisers that can enlighten them – here we go round the mulberry bush, the mulberry bush, the mulberry bush………here we go round the mulberry bush, forever and ever.
Visit us at Movement for Monetary Justice. mmj.my FB @Gerakan Keadilan Monetari