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On Britain’s relationship with Saudi Arabia, Corbyn expressed concern on what he referred to as a “huge number of issues,” naming the treatment of women, the frequent use of the death penalty — including public beheadings — and the treatment of migrant workers. At a recent Parliamentary debate, Corbyn raised the question of whether British arms sales to Saudi Arabia are more important than genuine concerns about human rights. Most of us already know the answer to this question. “We need to be a constant irritant on human rights,” he said. Asked how Britain can make itself safer, both at home and abroad, Corbyn was frank: “We make ourselves safer by not being part of U.S. foreign policy at every single turn. And we become a force for human rights rather than military intervention.”

Describing what an ethical foreign policy under a Corbyn-lead British government would look like, he said, “My basis would be that I want to see the protection and preservation of human rights around the world, deal with issues of global hunger and global inequality, and the environmental disaster that is facing this planet.” He added, “I think that should be the basis rather than what it is at the moment which seems to be to see what the White House wants, and how we can deliver it for them.”

Tim Worstall, writing in the UK Register, objects to Corbyn’s PQE (or OMF) on the ground that it cannot be “sterilized” the way QE can. When inflation hits, the process cannot be reversed. If the money is spent on infrastructure, it will be out there circulating in the economy and will not be retrievable. Worstall writes: QE is designed to be temporary, . . . because once people’s spending rates recover we need a way of taking all that extra money out of the economy. So we do it by using printed money to buy bonds, which injects the money into the economy, and then sell those bonds back once we need to withdraw the money from the economy, and simply destroy the money we’ve raised. . . . If we don’t have any bonds to sell, it’s not clear how we can reduce [the money supply] if large-scale inflation hits.

The problem today, however, is not inflation but deflation of the money supply. Some consumer prices may be up, but this can happen although the money supply is shrinking. Food prices, for example, are up; but it’s because of increased costs, including drought in California, climate change, and mergers and acquisitions by big corporations that eliminate competition. Adding money to the economy will not drive up prices until demand is saturated and production has hit full capacity; and we’re a long way from full capacity now. Before that, increasing “demand” will increase “supply.” Producers will create more goods and services. Supply and demand will rise together and prices will remain stable. In the US, the output gap – the difference between actual output and potential output – is estimated at about $1 trillion annually. That means the money supply could be increased by at least $1 trillion annually without driving up prices.

If PQE does go beyond full productive capacity, the government does not need to rely on the central bank to pull the money back. It can do this with taxes. Just as loans increase the money supply and repaying them shrinks it again, so taxes and other payments to the government will shrink a money supply augmented with money issued by the government. Using 2012 figures (drawing from an earlier article by this author), the velocity of M1 (the coins, dollar bills and demand deposits spent by ordinary consumers) was then 7. That means M1 changed hands seven times during 2012 – from housewife to grocer to farmer, etc. Since each recipient owed taxes on this money, increasing M1 by one dollar increased the tax base by seven dollars. Total tax revenue as a percentage of GDP in 2012 was 24.3%. Extrapolating from those figures, $1.00 changing hands seven times could increase tax revenue by $7.00 x 24.3% = $1.70. That means the government could, in theory, get more back in taxes than it paid out. Even with some leakage in those figures and deductions for costs, all or most of the new money spent into the economy might be taxed back to the government. New money could be pumped out every year and the money supply would increase little if at all.

Besides taxes, other ways to get money back into the Treasury include closing tax loopholes, taxing the $21 trillion or more hidden in offshore tax havens, and setting up a system of public banks that would return the interest on loans to the government. Net interest collected by U.S. banks in 2014 was $423 billion. At its high in 2007, it was $725 billion. Thus there are many ways to recycle an issue of new money back to the government. The same money could be spent and collected back year after year, without creating price inflation or hyperinflating the money supply. This not only could be done; it needs to be done. Conventional monetary policy has failed. Central banks have exhausted their existing toolboxes and need to explore some innovative alternatives.

Iceland’s Radical Money Plan Iceland, too, is looking at a radical transformation of its money system, after suffering the crushing boom/bust cycle of the private banking model that bankrupted its largest banks in 2008. According to a March 2015 article in the UK Telegraph: Iceland’s government is considering a revolutionary monetary proposal – removing the power of commercial banks to create money and handing it to the central bank. The proposal, which would be a turnaround in the history of modern finance, was part of a report written by a lawmaker from the ruling centrist Progress Party, Frosti Sigurjonsson, entitled “A better monetary system for Iceland”.

According to a National Assembly statement: Electronic money will stimulate the economy; it will be possible to attract more Ecuadorian citizens, especially those who do not have checking or savings accounts and credit cards alone. The electronic currency will be backed by the assets of the Central Bank of Ecuador.

The alliance consists of a number of mostly Islamist factions, including the Nusra Front, al Qaeda’s Syrian affiliate; Ahrar al-Sham, another large group; and more moderate rebel factions that have received covert arms support from the intelligence services of the United States and its allies. The Telegraph, in an early October article complaining that Russia was bombing “non-ISIL rebels,” similarly noted that the Army of Conquest (bombed by Russia) “includes a number of Islamist groups, most powerful among them Ahrar al-Sham and Jabhat al-Nusra. Jabhat al-Nusra is the local affiliate of al-Qaeda.” Even the Voice of America noted that “Russia’s main target has been the Army of Conquest, an alliance of insurgent groups that includes the al-Nusra Front, al-Qaida’s affiliate in Syria, and the hard-line Islamist group Ahrar al-Sham, as well as some less extreme Islamist groups.”

In other words, the claim from the anonymous Saudi official that the BBC uncritically regurgitated — that the Saudis are only arming the Army of Conquest but no groups that “include” the Nusra Front — is self-negating. A BBC reader, Ricardo Vaz, brought this contradiction to the BBC’s attention. As he told The Intercept: “The problem is that the Nusra Front is the most important faction inside the Army of Conquest. So either the Saudi official expected the BBC journalist not to know this, or he expects us to believe they can deliver weapons to factions fighting side by side with an al Qaeda affiliate and that those weapons will not make their way into Nusra’s hands. In any case, this is very close to an official admission that the Saudis (along with Qataris and Turkish) are supplying weapons to an al Qaeda affiliate. This of course is not a secret to anyone who’s paying attention.” In response to Vaz’s complaint, the BBC did not tell its readers about this vital admission. Instead, it simply edited that Saudi admission out of its article. In doing so, it made the already-misleading article so much worse, as the BBC went even further out of its way to protect the Saudis. This is what that passage now states on the current version of the article on the BBC’s site (emphasis added): He said those groups being supplied did not include either Islamic State (IS) or al-Nusra Front, both of which are proscribed terrorist organizations. Instead, he said the weapons would go to the Free Syrian Army and other small rebel groups.

So originally, the BBC stated that the “Saudi official” announced that the regime was arming the Army of Conquest. Once it was brought to the BBC’s attention that the Army of Conquest includes the al Qaeda affiliate Nusra Front — a direct contradiction of the Saudi official’s other claim that the Saudis are not arming Nusra — the BBC literally changed the Saudi official’s own statement, whitewashed it, to eliminate his admission that they were arming Army of Conquest. Instead, the BBC now states that the Saudis are arming “the Free Syrian Army and other small rebel groups.” The BBC simply deleted the key admission that the Saudis are arming al Qaeda.

But what this does highlight is just how ludicrous — how beyond parody — the 14-year-old war on terror has become, how little it has to do with its original ostensible justification. The regime with the greatest plausible proximity to the 9/11 attack — Saudi Arabia — is the closest U.S. ally in the region next to Israel. The country that had absolutely nothing to do with that attack, and which is at least as threatened as the U.S. by the religious ideology that spurred it — Iran — is the U.S.’s greatest war-on-terror adversary. Now we have a virtual admission from the Saudis that they are arming a group that centrally includes al Qaeda, while the U.S. itself has at least indirectly done the same (just as was true in Libya). And we’re actually at the point where western media outlets are vehemently denouncing Russia for bombing al Qaeda elements, which those outlets are  manipulatively referring to as “non-ISIS groups.” It’s not a stretch to say that the faction that provides the greatest material support to al Qaeda at this point is the U.S. and its closest allies. That is true even as al Qaeda continues to be paraded around as the prime need for the ongoing war. But whatever one’s views are on Syria, it’s telling indeed to watch the BBC desperately protect Saudi officials, not only by granting them anonymity to spout official propaganda, but worse, by using blatant editing games to whitewash the Saudis’ own damaging admissions, ones the BBC unwittingly published. There are many adjectives one can apply to the BBC’s behavior here: “Objective” and “neutral” are most assuredly not among them.