Perpetually on a loser with money supply system

THE UK national debt will increase by roughly £100 billion this year to an eye-watering total of approximately £1.4 trillion. These are “back of a fag-packet” calculations but that would appear to be the level of sophistication underlying Treasury policy. When one strips out loan interest repayments from this figure, Government overspend is almost halved to £55bn. Examination of historical records indicates that even in times of balanced budgets the Government pays large amounts of interest to the financial sector.

Does the current level of interest payments justify the scorched-earth “difficult decisions” that both major parties promise to inflict on us post the next General Election? Our own Rumpelstiltskin spinning sterling out of thin air, the Bank of England (B oE), churned out seven times this amount – £360bn – to support the stock market during the quantitative easing exercise. Sterling did not collapse and the world didn’t come to an end as a result of that exercise in buying back UK government bonds from investors and banks. Why can’t the BoE and the executive use the same mechanism to eliminate the budget deficit and even gradually pay down the national debt altogether? After all, it’s our state-owned bank and sterling is a fiat currency the value of which is based on the internationally perceived worth of the UK as a counter, not assets held by an empty Treasury and a “bank of last resort” which has scarcely any gold reserves belonging to the UK.

The other aspect is just who our government is borrowing money from and paying interest to. This is essentially the same banking system which without a massive injection of public funds would have been bankrupted and would have collapsed, the same banks who have yet to completely repay these loans and guarantees. These massive sums, multiples of our own budget deficit, are by sleight of hand not included in the widely publicised national debt figures, which in turn are being used as justification for a politically inspired dismantling of UK public services and state-owned assets.

The electorate is being offered the choice of being shot or kicked to death by spiders simply to support a system where democratic governance is trumped in a game rigged to ensure that the punter always loses and the house always wins. Heaven forbid we lived in a society where the money supply was controlled by a government that would never be in debt to the financial sector and those who own it, and indirectly us. David J Crawford. 131 Shuna Street, Glasgow. I CAREFULLY read Tom Greatrex’s Agenda submission regarding George Osborne’s Autumn Statement (“Black hole in oil revenues puts the SNP’s plans for spending at risk”, The Herald, December 4) . Mr Greatrex appeared to be almost gleeful the Office of Budget Responsibility had predicted a fall in oil revenue and suggested it created a “black hole” in the Scottish Government’s budget.

I appreciate he may have been so busy at Westminster he may not have noticed there was recently a referendum in Scotland; but I would have thought that as Shadow Energy Minister, he would already know none of these revenues goes directly to the Scottish Government. Prior to the referendum every penny of oil revenue went to the London Treasury, who grudgingly forwarded a small fraction to Scotland as part of the block grant. After the referendum the same applies. Paragraphs 69, 92 and 95 of the Smith Commission Report confirm Scotland will not get a greater share; even assuming it is ever implemented after deliberation by unwilling MPs and unelected Lords.

Therefore I cannot understand why he suggests a predicted oil price fall is a major threat to Scotland’s finances – but not to Westminster’s. He totals the spending of three Scottish public services at £9.8 billion, as if they would mysteriously vanish.

If Mr Greatrex was so concerned, why then, when he had an excellent opportunity to secure a greater share of oil and gas revenue for Scotland, did he join Conservative friends in collectively saying “No thanks”? R MacNeill, 115 Quebec Drive, Westwood, East Kilbride.