SAYING we cannot afford something is code for saying it’s not a
priority. We are a rich society. We have all the resources we need to deliver
better housing, health, education and infrastructure, but we choose not to. We
are constantly told we cannot afford them and we need to live within our means.
Imagine for a moment Australians were shipped
to a desert island, a new paradise. All facilities were there, infrastructure,
schools, hospitals, even a new K Block. Lots of people with all the required
skills are ready to start working, but nobody has any money. Neither does the
government nor its bank, the Reserve Bank. Nor do private banks or any
residents or businesses. The government cannot raise taxes or borrow money
because there’s no money to pay the taxes or lend to the government. Gridlock.
What would happen?
One practical solution would be for the
government to simply start spending money by crediting accounts. Hospitals
would be paid enough to operate. So too schools and other government
departments. Workers could then be employed and paid. Money would start
circulating. Some will return to the government via taxes. Businesses and
residents would start borrowing and spending. Without government spending in
the first instance none of this would not be possible.
Most of us have been led to believe the
opposite, that the Australian government must raise money before it can spend.
It’s not true.
Some people would regard this solution as
heresy.
