Ellen Brown has been studying the government debt problem for years and believes she has a solution. Rather than governments borrowing money from banks and outsiders, they should be borrowing directly from central banks. Thus any interest owed would be paid back to the government, eliminating a large portion of the resulting debt burden. Combine this with borrowing only for projects that will generate sufficient revenues to self-liquidate the loans and you have a prescription for responsible government finance. Canada did this successfully until the 1970’s, when the Bank for International Settlements stepped in and helped end the practice.
Now, Canada as well as most other developed Western nations, find themselves adopting austerity budgets, which Ellen believes will further accelerate the economic decline and have awful results. While Ellen’s theory may sound much like having our cake and eating it too, it is important to understand that nothing else has even come close to working, so every possible option must be explored.
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