Samizdata

The ‘Paul Marks Plan’ to save the world economy is inspired by President Bush and Tim Congdon. I can save the world economy on my own, all I need is the cooperation of the public authorities!

First interest rates must be reduced to a negative level (quite a moderate level, say -0.5% although I would settle for -0.1%) then I will borrow huge sums of money and use some of it to “buy cars” as President Bush has suggested. I will also “buy up every decent security in sight” every time the banks get into trouble – as Tim Congdon has pointed out must be done. But it is the “buy cars” suggestion that has really inspired me, and for a special reason. You see I can not drive – and so I would smash up the cars I bought in car crashes, thus meaning not only would I buy more cars, but the drivers of the cars I smashed into would buy more as well.

It would be a wonderful example of stimulating the economy via consumption. A point that the school of thought led by the late Lord Keynes and the school of thought led by the “monetarist” Tim Congdon are in full agreement upon. And whilst such Chicago School people as the late Milton Friedman might not be wildly happy with the direction of ever greater subsidies for the banks that Tim Congdon has taken “monetarism”, the great Tim would be quick to point out that Milton Friedman would not be able to present clear economic principles showing any error in his conception of money and banking – so it must be okay then.

In case anyone think the above is, er, insane… I would point out that it is more moderate than what the British government has already announced, such as one third of the entire British economy (not the government budget – the entire economy) being pledged to back up the banks.

This goes beyond even what President Bush and Congress have done in the United States. Surely we are moving towards the glorious day, worked for so hard by Tim Congdon, when the entire economy (not just the government budget, but everything) is devoted to subsidising the financial services industry. Let us reject such reactionary nonsense as the principle that every Pound of lending must be from a Pound of real savings. And let us also reject the reactionary principle that if a business goes bust it goes bust – and that a bank is no more entitled to protection from “bankruptcy” than a coal mine is. And, most important of all, let us reject the rigid dogma that once money is lent out the lender does not have it any more – till when, and if, it is paid back.

With ‘advanced banking methods’, backed by government of course, one hundred Pounds of physical savings can be multiplied to vastly more than that in loans. One plus one need not equal two – it can equal any number clever people want it to. And with credit money expansion by the public authorities any problem can be overcome. Credit money expansion, under the control of wise and well paid ‘experts’ of course, can achieve anything and no petty thing like either logic or physical reality can stand in its way.

We can achieve a perpetual motion machine – accept that it will speed up.

Of course scientists might claim both that such a thing was ‘impossible’, and that even if it was not that it would destroy the universe. But so what? If we destroy the universe we can create other universes – by an act of will. After all the physical distance between Chicago and Cambridge already seems to have collapsed.

As President Bush and Tim Congdon have explained – prosperity will return, as long as we pump out enough credit money!