This sounds like a good idea on the surface. But it should raise the obvious question of why we’re in this situation in the first place! And who would really loses?

Fiat money systems operate by the issuance of state-backed monopoly credit money by private businesses. The credit money is then redeemed against debt and is required by governments to pay taxes. It’s a form of “dual sovereignty” over the governance of the nations’ economies – private banks and governments.

A key aspect to this arrangement is the monopoly grant to the private businesses (operating as a cartel) to issue the *only* form of money acceptable for production taxes (Income Tax, VAT etc). To reinforce the cartel, producing other forms of money is prohibited. Credit issuers also benefit by trading on the basis of legally enforceable parity with each other – credit from a dodgy bank must be accepted as the same value as from a good bank.

Part of this private monopoly grant involves a strict prohibition on governments themselves issuing the credit money. Governments are required to purchase money from private banks in exchange for government debt instruments. Back in the distant past, this might have made sense – 400 years ago merchants’ credit was stronger than that of kings (who would renounce their predecessor’s debt). But now it is a nonsense economic transaction. The government grants a monopoly to private business to charge the governments a premium through interest backed by taxation to issue money. Money redeemed through the government against production. If the government can issue its bonds then it can issue its currency.

It becomes clear what government debt exists for. It is to facilitate an economic transfer from taxpayers to bankers. It’s essentially a welfare payment system for those with banking privileges.

Governments should be responsible for issuing and withdrawing tax-money from circulation. It’s little different from a businesses that issues vouchers to be redeemed against services provided. Government debt denominated in its own fiat currency is a ridiculous and overt fraud.

The problem is that a large section of private “business” is build upon this fraud. Banking has changed from being a simple warehouse of money or a secure shared accounting system to being seen as an engine of economic growth. It is the exact opposite – it is parasitic on the real economy, thriving on money issue (inflation) and government debt (taxes).

If one trillion Euros would help, why not two trillion? Why not issue currency to buy back debt completely? Why not issue currency directly to EU citizens as well (and tax it out via property taxes)? The answer unfortunately is that the advocates of such a policy would probably be assassinated. Some believe that this issue is the most common cause of US presidential assassinations (eg Lincoln, Garfield etc). And it would be a dramatic shock to the outsized banking industry.

But economically there is little doubt. The money used to pay taxes to the government should be issued by the government.

The article may be “ground-breaking” to Feasta and orthodox economists. But it just the tip of the problem which has been understood and written about by many for centuries. Causes of and solutions for the economic malaise are straightforward. The rulers, however will continue to enforce the status quo until collapse or a public awakening forces monetary reform.