LETTER OF THE DAY: Government funds are for social needs
LETTER OF THE DAY: I SELDOM agree with Clive Newton, but his "Letter of the day" on the Budget ("Abbott created problem", August 28) is correct.
However, our reasons differ; he is a socialist; I am a conservative.
Australia's Constitution puts responsibility for all bank incorporation and money creation with federal and state governments.
The Commonwealth Bank was incorporated at Federation. It financed WWI and major works Australia-wide under its Governor, Sir Dennison Miller.
Politicians and bankers argue "no", but only banks can create money (ex-nihilo "out of nothing") and destroy it after its purpose is achieved: rightly so.
Politicians of all persuasions wrongly repeat "government budgets are as household budgets and are bound by the same rules".
This displays ignorance by the politician and information concealment by their treasury departments.
Unlike ours, money from a government is authorisation to produce goods and services for socially desirable projects.
Government is limited only by the knowledge, materials and workforce available to produce them, not the money.
These are their "chits" or authority to create. Their banks can and should create "chits" on demand.
We don't need to go off-shore for money any more than we do for knowledge, materials, or workforce.