The final countdown?

This is especially true of such banks as Goldman Sachs, Citibank, Bank of America, J.P. Morgan and the privileged few at the centre of the disasters that led to the Global Financial Crisis in 2008 and which have intensified or failed to moderate the resulting turmoil since.

This must stop. Governments must no longer fear the banks or their failure. Governments must govern by confronting the banks and especially the investment, too-big-to-fail banks as they confront the rest of us. If they are corrupt, they must face the law. If they are effectively bankrupt, their bankruptcy must be allowed to proceed in accordance with the law.

Governments must take their courage in both hands and deal with the banks in the only way which will resolve our problems. If the banks fail, individually or collectively, governments must take control of them.

If need be, they must take control of the whole financial system or as large a part of it as may be necessary for the stability and welfare of the economy and society. In this context, each of them will need to take effective control of their individual national financial system and play a responsible part in the global financial system as well.

If that system is to work in the interests of the people it must be managed in genuinely democratic ways, by the people for the people. Instead of providing funds to "bail out" zombie banks, governments and their treasuries and central banks must use those funds to buy out, take over or establish their own banks which will do what must be done to rescue the national financial system as well as the global financial system and the global economy.

In the unstable situation of today, a crucial responsibility of governments is that they should be on high alert to ensure that they can assume administration of a modern banking system whenever it may be required. Government officials should be ready to take over the administration of failed banks to ensure that payment of wages and other everyday financial transactions will continue without disruption while the failed financial system is being reconstructed.

The government is the only institution which can temporarily or permanently take over from the bankers. We must therefore be prepared to nationalise the national financial system in whole or in part at any time. If we have assurance of such an orderly takeover much of the fear of failure or collapse of the financial system will disappear.

In the longer term, events of recent decades have confirmed that the banks or a sufficient proportion of them must be nationalised or be effectively managed by governments in the future if we are to have stable, responsible finances, stable growth and employment and tranquil societies. The banks must then perform the tasks of intermediation between savers and investors that are their essential function.

In present circumstances, only governments can ensure that this essential function – the key to economic growth – can and will be carried out by the banks – preferably all of them, national and global, large and small.

In whatever term, short, medium or long, fixed capital investment, productivity and production are the keys to economic growth and the effective handling of debt. They represent the greatest of the many virtues in the economic and financial history of the United States and they are just as crucial to the stable and sustainable growth of smaller economies.

To allow some normality to return to national and global economies, a moratorium should be placed on sovereign and possibly other major forms of long and medium-term debt. This moratorium may be for a fixed period of, say, two or three years and it may apply only to certain clearly defined forms of debt. Sovereign debt in particular may be capable of multilateral negotiation, at least in some measure. In general, the breadth and depth of the moratorium should be sufficient to allow (1) what I have called a return to at least short-term normality for the current economy and financial system and (2) thorough examination of the causes of excessive indebtedness and the procedures that may fairly be adopted for elimination or management of such debt now and in future.

Already much of the debt has been lost by its longer-term investors. A moratorium would likely do little more than formalise investors' loss of what little remains. Although the data available to me is not conclusive, such research as has been done suggests that a high proportion of nominal sovereign debt was already lost after the 2008 collapse and the continuing slide in market value, only partly offset by high yield, will eliminate most residual value before maturity. Only the traders in volatility on the money markets are likely to make much profit, almost entirely from successful speculative trading, in other words, transactions that have largely turned the money markets into betting shops.