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When banks offer loans, money is created as an IOU, something many MPs aren’t aware of. As a result the UK economy is based on ever growing levels of debt You might not all agree with all of Positive Money's proposals, but I have put this up for discussion. KV Back in November the big story arising from the Chancellor’s Budget wasn’t any of the gimmicks and giveaways designed to grab positive headlines, but something seemingly more mundane – the Office for Budget Responsibility (OBR) downgrading its growth forecast. This shouldn’t be a surprise. Governments are obsessively judged by analysts and commentators on one figure, whether it’s going up or down, and by how much: gross domestic product, or GDP. GDP measures the total economic output, or in other words, the value of
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When banks offer loans, money is created as an IOU, something many MPs aren’t aware of. As a result the UK economy is based on ever growing levels of debt You might not all agree with all of Positive Money's proposals, but I have put this up for discussion. KV Back in November the big story arising from the Chancellor’s Budget wasn’t any of the gimmicks and giveaways designed to grab positive headlines, but something seemingly more mundane – the Office for Budget Responsibility (OBR) downgrading its growth forecast. This shouldn’t be a surprise. Governments are obsessively judged by analysts and commentators on one figure, whether it’s going up or down, and by how much: gross domestic product, or GDP. GDP measures the total economic output, or in other words, the value of
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Mike Norman considers the following as important:
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When banks offer loans, money is created as an IOU, something many MPs aren’t aware of. As a result the UK economy is based on ever growing levels of debt
You might not all agree with all of Positive Money's proposals, but I have put this up for discussion. KV
Back in November the big story arising from the Chancellor’s Budget wasn’t any of the gimmicks and giveaways designed to grab positive headlines, but something seemingly more mundane – the Office for Budget Responsibility (OBR) downgrading its growth forecast.
This shouldn’t be a surprise. Governments are obsessively judged by analysts and commentators on one figure, whether it’s going up or down, and by how much: gross domestic product, or GDP.
GDP measures the total economic output, or in other words, the value of all of the goods and services being produced in an economy. While the prospect of infinite growth in the amount of things we consume might sound like a good thing, it would destroy the planet on which we depend.
These drivers of growth tend to be the result of out-of-date and incomplete understandings of the economy which have seeped into every level of political and economic debate. But there is also another, often overlooked, source of growth-dependency – high levels of private and public debt. A key driver of which is the existence of a money and banking system which, in its current form, works to burden society with an endless supply of debt. While some debt is useful, too much can cripple an economy and lay foundations for a crash.
It is clear that issues such as climate change and inequality are increasingly becoming too urgent to ignore. These challenges require a bold rethinking of society’s priorities. A good place to start is the dysfunctional money and banking system underpinning it.
This means a discussion of how we create money, and whether it should be created privately as debt, in a way which demands unsustainable growth. There are alternatives, which could allow us to create money sustainably, in a way which works for people.
One option would be to utilise Sovereign Money Creation, or “QE for People”. This would involve the Bank of England creating money through a similar way to conventional quantitative easing, though this money would then be injected into the economy through Government spending on green infrastructure, or even a citizens dividend to pay down private sector debt.
The Independent