Why has your pound note become a mere shadow of its former self in purchasing power? Though you toil and save, your pounds diminish in value as they increase in numbers, so that the house you planned to build or the car you hoped to buy remain always just beyond your reach.
There are those who say that high wages are the cause of the spiral, and they have undoubtedly aggravated the trouble, but a little thought reveals that higher wages were only granted to relieve the burden of previously increased living costs, therefore, we must look beyond wages to find the original fault.
Our economists and statesmen frequently tell us that we are developing our country too fast. They infer that the large quantities of credit money which are put into circulation by these development schemes are the cause of all our trouble. Now, if this were the case, the obvious remedy would be to take some of this surplus money out of circulation. This has been tried too; the banks have on many occasions pursued a policy of tighter credit and reduced overdrafts, and unless this policy is carried to the extreme thereby causing depression, no noticeable improvement in prices is evident. In fact the chief effect of this tighter credit is to cause acute embarrassment to industry, local bodies, etc. The reason is that the cause of our inflated prices is not because we have too much money, but because we only get this new credit money, as an interest bearing debt, and though the banks may reduce the money supply, the debts already incurred must be paid. The money to pay these debts can only come from one source you and I — the people of New Zealand. We pay in direct and indirect taxation, higher prices and rates.
This applies to a very great extent to Government borrowing, for under the present system the Government's only means of repaying loans and interest charges is by taxing the people and taxation is charged into the price of everything we buy. Customs duties, sales tax, amusement tax, these are but a few. When a baby is born his little garments are taxed. When a toddler buys his first ice-cream he begins to pay his taxes. Even when you die your casket will carry its share of taxation. It would be reasonable to assume you might rest in peace then, but no — you have not paid your license to die — that supertax — death duties.
It is useless entreating the Government to reduce taxation, for they must get the money for this mountain of debt and interest. They may reduce taxation for one section of the community, only to add it on somewhere else and the chances are that you will pay it just the same in increased prices. This monster of debt reaches out with invisible hands to rob us of the fruits of our labours, frustrating our every effort to build a better life for ourselves and our children.
HOUSEWIFE The N.Z. Social Crediter September 13, 1957