The Prime Minister
10 Downing Street
05 March 2000
Payments on National Debt
It was with great interest that I learned about your comment on
Newsnight on Monday Feb. 28th, that made the connection between the
cost of interest payments and the cost of the NHS. As Labour MP Norman Smith
said in 1944: There is always enough money for war, but never for health
If indeed New Labour wants to tackle poverty, if New Labour wants
to deliver what it promised its electorate, it needs to dare what Mrs Thatcher
did not do. She said that public expenditure can only be financed by borrowing
(thus adding to interest payments) or by taxation.
There is, however, the third way: the Government can create
interest-free notes and coin. Some economists will tell you that just
printing money will cause inflation. They forget, however, that banks do
exactly that: just creating money. But when banks do it, it is not only
accepted but seldom questioned on what authority they increase the money supply.
However, why should Governments be eternally indebted? The past has
shown that the National Debt can be virtually eliminated. The future can show
that the National Debt can be paid off, if you are committed to the third
way, a new dimension for Governments taking financial charge and thus ensuring
not just a voting but an economic democracy.
We were told by the Treasury that the Government wouldnt know
how to spend the money that it creates. However, as you do want to improve the
NHS, you obviously know exactly how to spend the interest-free money that would
add to your budget in the third way beyond taxation or borrowing.
In fact, you could go as far as creating money to pay off
the National Debt. Would you like to use us as a Creative Think Tank for how to
prevent Welsh Farmers from killing themselves because of financial problems that
are systemic rather than personal? Would you like to use concerned
citizens as systems analysts who can think outside the box that has become
the norm world-wide ever since the Bank of England was founded?
Should you be in any doubt regarding the above realities, we can
supply you with a bibliography and ample references including our submission to
the House of Lords Select Committee on the Monetary Policy
Committee of the Bank of England.
We look forward to seeing the NHS funded through your Government
creating money and wish you all the success you deserve.