By Marshall Bridge. The proposed cuts have barely started as yet, but when they do start to bite I fear we will see real hunger and privation throughout the land.
What we really need is to get down to the basic problem which was not caused by chronic overspending as some recent articles claim, but by chronic over borrowing – a subtle but important difference. This in turn gave us our chronic debt problem and the resultant cuts.
If National governments issued their own currencies debt free and in line with GDP, this problem would not arise.
We cannot expect respite from the current Westminster politicians, although a few MP’s of all parties are now monetary reformers, but I still believe that effective monetary reform at National level will have to wait until we get Nationalists MP’s into Parliament.
Reform at the local level may be a more immediate proposition. Most Nationalist will remember (though not from personal experience) how the Guernsey Islanders overcame the privations of the deflation following the Napoleonic Wars by issuing their own local currency to finance essential public works. The small town of Worgl in Austria introduced a local scrip during the 1930’s depression which completely eliminated unemployment locally, while it remained very high throughout the rest of the country.
Local currencies such as LETS and the Totnes Pound are well known, but my own favourite is the Council Tax Voucher scheme. Here is how such a scheme would work:- Assume that Central Government cut the 2012 grant to your local council by £20 million. The council would simply issue vouchers to the same value and gradually introduce them into the local economy.
The vouchers would be issued as part payment of council staff wages, or as part payment to local businesses for services rendered and I believe they would soon be accepted as a local currency. They would also be redeemable at any time as payment of council tax or business rate. The scheme would not be inflationary because the voucher issue would simply replace the government grant so there would be no overall increase in the money supply, nor would it add to the councils burden of debt.
If this voucher scheme was widely accepted by local councils, the government cuts would be largely circumvented with huge benefit to all of us.
I do realise that there may be problems regarding the legality of such a scheme, but a nationally known food outlet issues vouchers, so why not local councils?