Occupy the Economy

One of the positives about the Occupy Movement is that they have encouraged learning, thinking, discussion, about finance and the economy amongst people who have no knowledge of finance and the economy. Simon Dixon, in this video, says the system is crazy and is broken and talks about moving towards a sustainable economic system.  He is saying that banks create ‘money’ by lending ‘notional money’ (my term) and charging interest. Each time they lend ‘notional money’ they create ‘money as debt’ . If I borrow money from the bank to buy something of real value such as  a house I incur a debt that I must repay by selling my labour or assets. If I sell my labour to the state as a teacher or doctor, etc.,  the state pays me through raising taxes and borrowing money; if I sell my labour to a non state business that business pays me through selling the product of my labour. I have sold my labour to the state and the state has agreed to pay me a pension as part of my recompense, however in addition to paying me the state needs to repay the banks. But the state does not receive enough income from taxes to  repay the banks, even repaying the interest has become so difficult that the only way the state can do this is to raise taxes while cutting spending and selling assets. These two short videos argue that these solutions cannot work:



The first video claims that the predicted economic collapse is intentional. Simon Dixon argues that this is unlikely, but his rationale, that politicians do not understand finance well enough, is not convincing as financiers do understand finance. Nevertheless Simon is apparently offering some attempt at a solution.

Dennis Kucinich seems to be saying essentially the same thing as Simon Dixon, that there is a need to take away the ability to create money from the private banks and give it back to states. This should go hand in hand with a move to more direct and participative democracy.