DEBT MONEY.

Auckland Star, Volume LXIV, Issue 136, 12 June 1933, Page 6

DEBT MONEY.

The principal objections raised against our Mayor's proposal to remove poverty from our midst arise from the fear of getting deeper into debt. We have so long accustomed ourselves to the notion that all new money should be debt money (because all new money comes into existence as an interestbearing loan to a bank) that any proposal to issue new money otherwise than as a debt to be paid ba.ck to those wlio are supposed to find the money which does not exist is regarded as unsound finance and wild-cat inflation. And so the Mayor and his supporters put their proposals in tho orthodox form of a loan, and the only objection is that it will be impossible to repay. The new economists would say, "Why should any new money come into existence as a loan?" If new money is necessary, why should it not be created by the State as permanent interest-free money? Can service not be rendered for it? Caii goods not bo produced to be bought with it? As long as goods and services can be exchanged, why should there be any debt' about tho business? And why should any money that has. been earned or may be earned be ever destroyed'/ (As it is when bank overdraft loan money is I repaid.) Surely in a progressive community there should never be any necessity to destroy money; the only need should be to provide more to enable increasing services and goods to be exchanged. It is being realised more and more that it is the overdraft system of finance that renders all our efforts to wipe out debt unavailing. We can only pay our way by contracting further loans, and in consequence the whole world imagines itself to be bankrupt, when the reality is that it is richer than ever. Let us take the bull by the horns and try a common-sense system of finance under which we shall be able to pay our way as we go by creating the money necessary for the exchange of our goods and services. W. J. GATENBY.