Budget surplus should have been $4 billion

Democrats for Social Credit finance spokesman Chris Leitch has attacked this week’s budget and its tiny surplus labelling its authors “criminally negligent”.

“Without a single extra dollar in tax revenue, user charges, or money from asset sales, the surplus should have been $4 billion”, Mr Leitch says.

“The Finance Minister and the Prime Minister are proposing to squander $3.6 billion of hard earned taxpayers money in the coming year on interest payments on borrowing - loans created out of thin air.”

The Bank of England confirmed last month in its quarterly bulletin that commercial banks create money out of thin air when they make loans.

The lengthy article on money creation says -

“One common misconception is that banks act simply as intermediaries, lending out the deposits that savers place with them.”

“…..rather than banks lending out deposits that are placed with them, the act of lending creates deposits. Commercial banks create money.”

“Of the two types of broad money, bank deposits make up the vast majority - 97% of the amount currently in circulation. And in the modern economy, those bank deposits are mostly created by commercial banks themselves.”

(Bank of England Quarterly Bulletin Q1 2014)

Our own Reserve Bank has said the same –

“Therefore around three percent of M3 is created by the Reserve Bank (currency and primary liquidity), with the remainder being created by commercial banks.”

(Reserve Bank letter 1 September 1994).

The budget cut around $700 million from departments such as Police, Ministry of Justice, Corrections, Customs, and Environment and Conservation while instead providing a direct line of corporate welfare to the banks through interest payments.

Instead of John Key’s government getting its funding from the Reserve Bank at no interest, it is paying interest on loans created out of thin air, a ludicrous situation which shows the Finance Minister is either incompetent or ignorant of the facts.

Either means he is not fit to be Minister of Finance.

ENDS

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