The one common factor shared by the capitalist nations facing so much decline is a general ignorance of their monetary systems among all but the elites. When Nixon removed the US from the gold standard imposed by the Bretton-Woods agreement he changed global economics by 180 degrees, but so little fanfare for that was generated by the media and political leadership that the average American still believes their government is restrained by tax revenue or borrowing.
In order to establish division among the working class, it is imperative that it believes that “ITS” money funds its government. If the working stiff who toils at mind-numbing repetitive tasks to build some equity in his/her home, the only store of value most have, while also seeing to the daily needs of their family, thinks that someone is using “their” money to support “others” who aren’t productive they can be manipulated to act as a watchdog for any spending that benefits those others. This is the grand lie that accompanies social decline, including racial and class division.
About the same time that RayGun was telling America that “government IS the problem” following the devastation of the oil embargo by the Saudi lead cartel, Thatcher was telling Brits that “there is no PUBLIC money, only TAXPAYER money”. The decline in both countries can be followed back to those remarks, because they were pure BS but set in motion a trend of austerity motivated by a fear of their nations’ debt. Both nations, as well as many others with sovereign fiat currency, sans a gold reserve to defend, could “afford” anything that was physically available and priced in their respective currencies, even without any “revenue” by simply creating the currency necessary to purchase it.
Inflation is not possible in such an economy unless all resources are being utilized to the maximum of productivity and all workers who desire a job are gainfully employed. Individual commodities can inflate in price from scarcity or supply chain problems, but that isn’t the dreaded monetary inflation that politicians use to beat their constituents about the head and shoulders should they be so bold as to demand any benefit to their miserable lives from their government. The oil crisis embedded the fear of inflation in the people because oil was, and is still, intrinsic in the production and delivery of all other commodities.
The ultimate consequence of this misdirection and ignorance is an assumption that the monopoly issuer of a nation’s currency must “get” money from the people, or their businesses, by taxation or borrowing before spending into the private sector. This makes it quite easy to posit the government as a competing “user” of the currency and the private sector businesses as the “source” of all economic growth and wealth. Understanding this backward perspective of money is vital to understanding why an entire working class of a nation would vote against their own best interests so consistently.
American/British economics isn’t the result of the racist and classist division. Those divisions are the result of misguided assumptions about the “people’s” money and how it works in “their” economy. Neither country can ever “go broke” or fail to pay any obligation denominated in their respective currencies and the “debt” of both nations is nothing more than a record of all currency created by their government that hasn’t been yet used to pay a tax obligation to the currency-issuing government to comply with dual entry spreadsheet accounting used worldwide to track money, not an obligation of the taxpayers.
Both governments/economies are only limited by the availability of “real” resources and the productive capacity of their people, not their money supply which is infinite. Forcing austerity on the people drives them to take on unsustainable private bank debt and destabilizes their economies. Private sector debt cannot be retired in net terms by more debt. Only the infusion of public capital can do so. This is obscured by constant GDP growth that allows private sector debt to be “rolled over”, presenting the illusion of it being retired, until the business cycle falters in the slightest as we saw in ‘08.
Both countries needlessly issue bonds to “match” their deficit spending, not to finance it, creating more wealth for the investment class and empowering the central banks to manipulate interest that can be used to prevent full employment as needed by business to dominate labor. Should the people ever find out how they have been manipulated and denied such basics as food, basic healthcare, and shelter, the blood of the wealthy and their lapdog politicians will run deep in the streets.
