The DSC Plan for Financial reform details the mechanisms and tools to establish a just financial system. Once the plan is implemented many other serious issues which face our planet and our people can then be addressed.
The following comments have been extracted from the DSC submission to the "Inquiry into the future monetary policy framework" - Issue IV. New Zealand economy’s capacity for non-inflationary growth and how it can be improved.
Our reply:
DSC believes that under the current financial system “non-inflationary growth” is impossible,as all growth is dependant on borrowed money which incurs interest, which must then be added into prices. Thus the price of money contributes to cost inflation.
Whether the economy has been managed in a monetarist way or a fiscal way, the boom/bust cycles continue to occur. Until the issue of ownership, distribution and cost of new money is dealt with, cost inflation and ever increasing debt burdens will continue.
In addition, the use of Gross Domestic Product (GDP) as a growth indicator is another “blunt instrument” that inadequately reflects the genuine state of the New Zealand economy. GDP lumps negatives such as massive storm damage with business success as part of the same “growth”, while other activity such as volunteer work and the contribution of the environment go unrecorded. A raft of new measurement tools need to be applied in order to accurately record both positive and negative aspects of the economy, the society and the environment.
DSC recommends
• That growth should not be limited by money or its cost but instead by the
availability of labour, technology and materials, and by environmental impacts.
• Any planned economic growth should be toward achieving a carbon neutral status
for New Zealand.
• That Reserve Bank Credit at cost be made available to fund businesses, territorial
authorities and other groups who grow and expand their activities in making the
transition to a carbon neutral status for New Zealand.
• That the government actively promote economic growth in areas that help to
achieve a fossil-fuel free status for New Zealand.
• That new measurements of progress be employed, Genuine Progress Indicators
(GPI) that track social, economic and environmental progress, in order for funding
to be provided in areas that need assistance.
Comment: DSC since its inception has advocated reform of the monetary system, not as an end in itself, but to realise social, economic and environmental justice. Measuring the market value of economic production tells us very little about the broader health of the community or the environment, and nothing about the social costs of what has been produced in the economy, or about its usefulness or sustainability
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