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Minister stephen - My Blog
Why Poverty Exists
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Poverty is a seemingly complex issue; there are many various causes that create conditions of poverty such as lack of education, natural conditions of drought or flooding, and corruption. However complex, there is a single issue that more than any other condition that perpetuates a spiral of ever increasing poverty in the third world, that issue is "use of debt money."



debt3.jpg

Governments borrow money, and like any lender the one lending the money wants to be paid back, with interest. Seems fair enough. The problem is that when governments borrow it is the real people whom have to repay the loans, and make interest payments.

"The developing world now spends $13 on debt repayment for every $1 it receives in grants." ~ Global Development Finance, World Bank, 1999

Adding insult to injury, the people of a country often never receive any portion of the funds that their government borrowed.



"The poorer the country, the more likely it is that debt repayments are being extracted directly from people who neither contracted the loans nor received any of the money." ~ Debt - The facts, Issue 312 - May 1999, New Internationalist child2b.jpg



The citizens of countries wind up paying the bills because they have pledged themselves to back the public faith of their governments debt, they are "citizens" and as such are the only collateral governments have, so governments borrow and then necessarily extract resources from their citizens to repay the Creditors. povertyfam.jpg



In 1997 the foreign debts of 'developing' countries were more than two trillion US dollars which averages out to a debt of $400 for every man, woman and child in the developing world - where average income in the very poorest countries is less than a dollar a day. Clearly this is non-sustainable.



Most of the increase in debt during the 1990s was to pay interest on existing loans. It was not used for sustainable development or education, or to address the causes of poverty. In six of the eight years from 1990 to 1997, developing countries paid out more in debt service (interest plus repayments) than they received in new loans - a total transfer from the poor South to the rich North of $77 billion. childpain1.jpg



You would think the richer countries had enough, maybe at least enough to decrease the developing worlds interest payments so less people need starve.



"According to UNICEF, 30,000 children under the age of five die each day due to poverty. That is about 210,000 children each week, or just under 11 million children - under five years of age, each year." ~ State of the World's Children, 2005, UNICEF



In return for new loans to poor countries, the lenders insisted on 'structural adjustments' to increase their chances of being paid back. This meant cutting government spending on things like healthcare and education - the very services on which poor people, women and children in particular, rely upon to escape the cycle of poverty. Many of these countries have ended up spending more on servicing their debts than on the basic needs of their citizens. deth1.jpg



"The lives of 1.7 million children will be needlessly lost this year [2000] because world governments have failed to reduce poverty levels." ~ Missing the Target; The price of empty promises, Oxfam, June 2000



The debts of the poorest 'low-income' countries are owed to First World governments, or private corporations and 'multilateral' institutions like the IMF. In many cases the Third World governments never even borrowed the money in the first place, instead private debt was transformed into public debt through government guarantees and 'support' for private business. Its not unlike when your credit card debt gets sold to a Third Party Collections company, you didn't contract with the company collecting on you and now the bill has increased over what you owed do to interest, penalties, and processing fees.



It should seem obvious that continued use and borrowing of money which requires interest be paid on it only continues the cycle of poverty. But what other money is there to use?




It seems logical that a complimentary digital currency might provide a solution to this cycle, it would if it could meet the following honest monet criteria; digicash1.jpg




1. It is usable by the individual Globally, meaning usable in a single forum amongst any people irrespective of national, geographic, or other distinctions;



2. It is interest free;



3. It is earned as opposed to borrowed, so it is used as a "Credit" as opposed to a "debt" instrument;


4. Can be earned by activities people are already engaged in;


5. It can be earned starting with nothing;


6. IT IS BASED ON ASPECTS OF BEING HUMAN - NOT NATURAL RESOURCES; a Information Age economic model to compliment the Industrial Age economic model; and


7. It is exchangeable through peer exchange mechanisms both on-line and off with the current publicly issued money system and its various debt bssed urrencies;




~ May You Be Blessed With Good Health, Long Life, Prosperity, Wisdom, & Peace


May 2, 2008 | 3:10 PM Comments  0 comments

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