If You Won't Get Rid Of Our Economic Enslavement, At Least Reform It

As the country is divided on and debating the health care bill in congress, little attention has been given to the real problem of our country. “It is not about whether the government is too little, or too big, it is about if government works,” Barack Obama cleverly put it during his inauguration speech in January. I completely agree, but unfortunately our government cannot work unless we rid money from politics. It is possible, but would take a huge grassroots effort. Nonetheless, money in politics is not the prime focus here. In my wonderful world where money is eliminated from politics, and the laws are not given to favor big corporations, banks and insurance executives we could not only have a functional public health care system for all, but also a banking system for all that would simplify our economy and create more time for social and as well as scientific progress.

This may come off as being incredibly Marxist, but the whole idea of banks, loans and interest is absurd. Banks make a profit off of collecting interest. This contributes absolutely no wealth in real terms to the economy: Nothing is produced, nothing is bought or sold. It does not take very much research to understand how the banking system has caused, or exacerbated recessions and depressions. In fact, our entire financial system was at the heart of last year’s economic meltdown. Maybe it is the result of greedy individuals trying to manipulate the system, but if we are all inherently greedy in some ways how could this crucial aspect of our economy ever be a function of social good?

Maybe capitalism is the root of the problem. I am personally not prepared to go that deep. I suppose I take a strict Keynesian approach to this issue and will suggest that there are certain functions of our economy and society that should be run by the public. This is not to propose that the federal government run our banking system. Instead, I believe local public institutions can effectively provide the essential services that banks do. In this way, people who need loans and have decent credit can get loans from these public institutions without any interest and a reasonable payment plan. This would allow people to spend their money on other things, which would in turn stimulate the entire economy.

One of the biggest reasons the United States got into so much trouble last year were subprime loans. These were loans given to people who had horrible credit, but given to them with enormous interest rates that they would never be able to pay off. A public banking system would prevent loans to people who have such bad credit, but would allow room to improve easily. Therefore, we would be smart with the treasury stored for these loans, and also set up some support for those with bad credit. Since it would also boost the entire economy, those with bad credit would have more opportunity to build up their funds and improve their credit situation.

Furthermore, a public system would help create a less volatile economy. It would lessen the effects of big recessions. For instance, India’s Congress party, which had previously denounced their public banking system, praised the institution and said that nationalization was one of its greatest achievements. Congress president Sonia Gandhi argued “Public sector financial institutions have given our economy the stability and resilience we are now witnessing in the face of the economic slowdown.” (http://www.stwr.org/india-china-asia/the-importance-of-public-banking.html) Banking, and the entire financial institution for that matter has become an increasingly complex sector that as a private profit seeker does not serve any practical use for society. All it does is further our enslavement to the current economic system.

Where would the money for this program come from? Well our federal government recently gave the private banks over $750 billion dollars because they were about to collapse (from their own incompetency I might add!). Thus, we can assume that with a public system, there would be an elimination of a middle man and there would be little need to increase taxes.

Our economic system is large and complicated, but most of it is needlessly intricate. The financial institution is one of those structures in our society that only benefits the few who have been in charge for a long time. I write this to merely provoke some thought. Many people have protested the bank bailouts. In fact, most people on the left and right opposed the bailouts in some way. Yet, they continued, under the guise of “too big to fail” Indeed, they might be too big to fail. So why should we continue placating a system that in the end screws over the mass population? I don’t think we should, I think we need to drastically reformat that system. Unfortunately, if we do not get money out of politics we won’t be able to successfully reform anything.