The proposal has been killed as it should have been.
Is this proof that our politicians are sensible?
Not at all of course. What happened here is merely a calculation aimed at self preservation. Someone realized that in going through with the plan, society would begin to question the role of the central bank; as they indeed should.
If Treasury is legally entitled to repay the entirety of the debt generated by a Debt Based Fiat Monetary system (DBFM), then why don’t we just do it? Similarly, if Treasury is legally able to create the currency, why exactly do we need a central bank? More importantly, why should government borrow money from a third party and pay interest when government can create its own money?
These are questions that central banks do not want asked.
Please note. I am not advocating that Treasury should take over monetary policy perpetuating DBFM. Monetary policy should be in the hands of the public and politicians should not have free rein in managing the monetary system just as unaccountable and unelected central bankers should not either. In this respect a value based monetary system or a fixed amount of fiat money would be desirable and would serve to, at once, eliminate the central bank and restrict government excesses.