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A “Clarion” mare’s nest

The Clarion is a comic paper, but never more so than when it treats of economics. Its latest outbreak is entitled, with unconscious humour, “Mind Your Own Business”, and advocates the adoption on a large scale of the Guernsey plan of raising money for municipal expenditure by issuing notes redeemable at term and acceptable in payment of taxes.

The people of Guernsey are reputed to have raised £4,500 in this way, about 100 years ago, calling in £450 annually to be destroyed until this whole had been redeemed, and they are understood to have never repeated the experiment.. The Clarion writer, however, to rid the municipalities of their debts and to obviate all further borrowings, advises the wholesale adoption of the Guernsey idea, no doubt upon the principle that since a man may take a fraction of a grain of strychnine without serious harm, he may therefore take a few ounces with impunity.

Cooking the Books 2: Silly money

We mentioned last month that currency crank ideas flourish in a slump as the problem appears to be a lack of money, as implied by the term “credit crunch”. The government itself seems to accept this view as it thinks that pumping money into the banks will solve the problem. As this is not working (because banks are not going to throw good money after bad by lending to firms they think won’t make enough profit, due to the slump, to be able to share some of it with them as interest) others are coming up with other proposals.

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