Modern national and global economies malfunction on a single flaw: themoney we use as our means of exchange is not in fact money but debt. Bankscreate money out of nothing and lend it to governments, businesses andindividuals: and that is where "money comes from."

That money has to be paid back at interest and accounts for virtually allthe money in circulation. The money that circulates in the national, and indeedglobal, economy gets there by virtue of this process of lending it intoexistence. It is removed from circulation as debts are repaid.

The existence of money therefore depends upon the existence of debt. Themore money we wish to have in circulation, the more debt we must carry tosupport it.

The more outstanding debt there is, the more the money lenders prosper byvirtue of the continual flow of interest payments therefrom: it is the intereston debt that constitutes their profits.

The banking sector, at whose apex sit the powerful dynasties of the money-lendingelite, therefore has a vested interest not in the achievement of solvency butin the maintenance and expansion of overall indebtedness.

The system is rigged to the benefit of that sector which supplies theeconomy with money in the form of interest-bearing loans. The privilege ofmoney creation and the power to decide, through policies on lending, who willhave access to money, delivers into the hands of private-profit money lendersnear absolute power and renders them for all practical purposes a power echelonsenior to governments.

As economies expand, they require more money so, in our debt-based system,the more an economy expands the more it has to go into debt. It is no surprisethat the world's biggest economy, the United States, is by far the mostheavily in debt.

Government, business and private borrowing must be undertaken in order toprovide a circulating stock of money. This system is a trap because it becomesimpossible for the economy as a whole to get out of debt much as the human beingswithin it strive hard so to do. It presents Man with an impossible paradox: theonly way to reach overall solvency is to reduce economic activity to zero!

Moreover, levels of debt must increase if the economy is to be kept out ofrecession because money is borrowed into circulation AT INTEREST. It has to bepaid back and when it is paid back, the interest added ensures that more moneyis removed from general circulation than was borrowed into circulation to beginwith. That shortfall is compensated for by a further, greater round ofborrowing. When that money is returned to the banking sector at interest, aneven greater round of borrowing is required to replace it. Thus, borrowing andthe levels of debt that must be shouldered by government, industry andconsumer, ratchets inexorably upwards.

Government borrowing is an important component of the money supply andgovernments run up their national debts in order to supply money to theeconomy. National debts tend to ratchet upwards and in a debt economy theever-growing national debt is essential.

Governments supply the economy with money by borrowing it and spending it onprojects. As it is spent on government projects, it enters general circulationand so is added to the money stock. The debt is then repaid at interest bytaxing the citizen. This is the process by which the entire nation assumes adebt so as to ensure money circulates in its economy. The citizen repays thedebt through his taxes.

Companies working closely with government, within the nation'smilitary/industrial complex are able, in effect, to cut off consumer spendingpower at source, capturing it at the point it is released by government. Theyare further advantaged by the fact that the corporate powers involved inmanufacture and supply to the military are closely interwoven with the bankingsector that does the lending.

New money released into the economic through military spending results in anincrease in the number of tanks, missiles and so forth. This however does notadd WEALTH to the economy: there is no improvement in the material condition ofthe consumer, things are produced that he cannot consume. Adding new money tothe economy without a commensurate increase in goods and services the consumercan enjoy is inflationary. Military spending therefore pushes inflationupwards. Increased government borrowing pushes taxation upwards.

War and preparation for war is profoundly beneficial to those corporationsproducing arms and other war-related merchandise. War and threat of war is profoundlybeneficial to the banking sector because war is expensive. Governmentsembroiled in war or fearful of some enemy are compelled to borrow so as tofinance the war effort. Nations devastated by war are compelled to borrow so asto repair and rebuild.

The banking sector's position as lender to governments that desperately needits continued supply of credit, puts the banking sector in a position where itcan profoundly influence government policy, through its own policies onlending, the setting of conditions for its lending and so on.

In a debt economy in other words, government is not master of its owndestiny.

The debt system of money creates a hidden power echelon senior togovernment. And that turns democracy into a sham.