A new project will promote the idea that it is the government - not the private sector - that creates money. In doing so, it could demolish the arguments for austerity...Left Foot Forward
Could this alternative theory of money radically change how we think about the economy?
Will Carter
4 comments:
According to neoliberals, even if it is true that monetarily sovereign governments can never run out of their own currency, we still need austerity (for the lower classes anyway) in order to avoid becoming Greece or Zimbabwe.
In other words, ever-worsening austerity (for the lower classes) is our only defense against ever-worsening hyper-inflation.
I saw this video on YouTube the other day and this guy laid into the Fed saying he had read the Jekyll Island book and now he was a Austrian (economics). The YouTube viewers seemed to be all libertarians.
I wrote in the comments section underneath and said,
'but if all our money supply came from the private banks society would have no net savings. Some richer people would accumulate wealth and it would be theirs, but the money is still owed to the banks. The rest of society would have to borrow the money to create the money supply and they would have to pay the interest on all the money that has been loaned out. The money that never gets paid back would get compound interest in it.
Some of the money the rich own might get reinvested, but the money needed for the profits would have to come from the private banks when people borrow money to buy the products. And some of money the rich own will disappear into tax havens. If so much of the money never gets paid back, because some people accumulate wealth, how can the system work? Austrian economics doesn't work'.
I thought it would get all the right wing viewers of the YouTube video thinking a bit. I can't say I've fully worked it out, but I'm working on it.
Konrad, The Bank of England and the German Bundesbank suffer from EBS. Re the former, see the opening sentences here:
https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy
@Ralph Musgrave:
I have seen that quarterly bulletin. It is precisely what spawned EBS, which by now has infected countless people.
In it, Bank of England representatives claim that the Bank of England creates all money in the UK except for coins and currency notes. This would mean that all money in the UK is created as loans.
For Ellen Brown, "If the Bank of England says it, then it must be true."
Wrong. Bank of England representatives are flat-out liars.
I haven't seen the same lies echoed by the Bundesbank, but I haven't checked.
Former Fed chairmen Ben Bernanke and Alan Greenspan never told these lies. When asked, each of them said the United States government can create money to pay any bill.
The Fed creates money to pay interest on T-securities.
Post a Comment