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We seem to be learning nothing from history
12:30pm Wednesday 20th June 2012 in Read
SIR – The coalition Government has learned nothing from the depression of the 1930s.
Austerity didn’t work then and it is not working now.
The Bank of England has increased the money supply (quantitative easing) by £300 billion since 2009 and we are still in recession.
There are much greater cuts to come than have been made hitherto.
Now the Bank of England is offering £80 billion of ‘cheap’ loans to the banks in the expectation that they will lend to businesses at lower rates.
This £380 billion should have been given to the public sector so that government and councils could place orders with the private sector for infrastructure work, and to raise the standard of education in state schools by bringing down the pupil-teacher ratio.
That would put people to work instead of persisting with the nonsense of austerity and mass unemployment.
Channelling new money supply through the banks hoping that it will be borrowed and boost business and create confidence by buying government bonds has failed.
The banks should wait until the money has passed through the hands of wage earners before being deposited with them.
That’s how banking used to work successfully before the bankers plunged their snouts into the trough where they remain today, courtesy of New Labour and the Lib/Tory coalition government.