How to Fuel the Economy Without Increasing Debt, through Sovereign Money

38 comments on “How to Fuel the Economy Without Increasing Debt, through Sovereign Money”

  1. Matthew Stannard says:

    So the plan is to replace an anticompetive oligopoly of debt creation with an anticompetive government monopoly on fiat currency creation…. Surely a better solution would be to allow competeing currencies and through fitness functions, let market demand evolve a best solution.

  2. GovernMentalFreedom says:

    The GovernMental approach is not what Independence / Freedom is about  as we lose independence and become  victums of Govermental Hitler war mongering greed so lets go kill something to feed us again !!!!  One day people are going to want peace so bad the GovernMental is going to have to get out of the way !

  3. Ankit Patel says:

    doesn't your solution create excess demand in the economy hence creating inflation?

  4. Daemon Nice says:

    Is not the Bank of England a privately owned institution and therefore if the BoE prints money it would be more debt money? 

  5. Mike Garrard says:

    Ben et al, excellent proposal!  Only a handful of politicians understand this and proposals I have seen e.g. Cobden Centre generally conflict with banks' interests and are thus going to struggle.  MP Carswell's credit/checking is a start but private members' bills also rarely make it.  If I understand correctly, this looks like QE but through productive economy not bonds?  Hence implementation would be a decision of Osborne?

  6. Nicola Shaw says:

    Missing the entire point, the private bank of england needs to go, so that we don't have to pay interest on money that is printed & tax payers aren't saddled with greater & greater debt.

  7. R L says:

    Ben, this is one of the best, clean-cut, informative speeches on such a complex matter I've EVER seen. Congrats. Fantastic! Thanks for making me understand and see the cross-connections! Awesome!

  8. Guillaume Blanc says:

    This is a nice general awereness video about the problems of the economic system. However, it seems rather short-sighted and conclusions are drawn too eagerly. First, as you tend to focus on this point throughout, housing prices are less affordable no matter what system you use, for the simple reason that population grows (I am not saying this is the only determinent of house prices). Now what you are suggesting is creating a Department of Spending within the UK government, fully funded, for free, by the Bank of England, not via the efficient, open and transparent money/bond market that we have today — which is not the problem of our economic system — , but with a loan with 0% interest. This is very dangerous, and many countries forbid such transactions for good reasons. The talk goes on and argues that government spending will create virtuous cycles, and that taxes on those spending will result in the government's reduced debt. I could buy this if we do not consider the loan from the BoE as a debt. But it is. Further, the story does not stop there. What is the effect of these expenses on the prices, and health, of competitive firms? If this spending gives 200k jobs, what will happen to these jobs when the BoE, which supposedly makes independent decision regarding money emissions, will decide to cut this spending? One more point; bank, it is true, can create money 'out of thin air', and charge interest on it. This is simply because they assume the role of intermediary, allowing the users of this money to make final payment when they trade. So the risk of no-repayment is not any more on one of the traders, but on the bank; this justifies charging interest rates, which, if competition works (and this being not always the case is another problem entirely), should be set in such a way that they exactly cover the risks taken. There is absolutely nothing wrong about that mechanism of trade, which can be seen as one of the greatest inventions of mankind (really; money is THAT powerful). The problem does not come from there. QE did not work as much as it was expected to for reasons unknown to most, yet alternatives are difficult. There are more direct ways of making money 'flow', but the easy method that are described in this talk are possibly not sustainable and most certainly harmful to the economy. The analysis is shaky at best; certainly because of the audience of the talk. There is no denying that the economic system needs a change; but for a proposal to really be taken seriously, more effort is to be put in the careful scientific study of the new system. This is a very tedious task indeed, one that I, and others, are undertaking as we speak. You've done a great job raising awereness of where money comes from; but you should be careful on some parts of your talk, where you make too-easy a claim to be true. This makes it deviate from what would otherwise be a good linen of argumentation to, to put it bluntly, simple populism. I fondly encourage new economic thinking and movements that sprouted after the crisis such as positive money; yet it seems too much effort has been put into media coverage and not enough into careful scientific analysis. I'd be more than willing to voice my concerns more clearly on this talk and positive money in general, and share some ideas on how some research could help improve your argument. In the meantime, I wish you and positive money all the best.

  9. Coop Wannabee says:

    An excellent 32 mins of viewing, which cleared up a LOT of the financial 'goings-on' in my head! Thank-you, Ben Dyson.

  10. Dai7261 says:

    Hi Ben It's Dai from the money chronicle on at 26:37 on the time line you make the claim that 10bn will create 28bn worth of spending but, you did not explain how this money is nearly tripled. You just stated it was so.

    For your average person or house wife if they go out and spend £10 they can only buy £10 worth of goods not £28 worth. The claim that £10 worth of spending can create £28 may be correct through something like the volume and velocity of money but, to the average person who can't see past the end of there nose as far as money and how it works, this sort of stuff needs explaining and demonstrating how it's possible.

    If we are to convert the the average person to our cause we need to justify our claims. They may make a lot of sense to us but, the average person they make no sense at all in fact it may sound like BS unless we explain or show how it is possible. I think another video is in order showing how it is possible to turn £10bn into £28bn of spending.

    In another video you used the analogy of an island and creating money for the islanders to use so, how would these islanders turn £100 into £280 worth of spending?

  11. razgarnett says:

    thank you

  12. Ricardo Afonso says:

    When you advocate "sovereign money" .. how exactly would the process be? Governments would borrow at all-time low rates? But that would keep increasing government debt, not reducing.

  13. George L. says:

    It's not bad. I only oppose the climate change bullshit. I hope you are not getting funded by these corporations.

  14. TheMagnificentZoltar says:

    Your arguments make sense. This sounds like a very well thought-out plan. Let's not implement this.

  15. lancsFrogger says:

    QE enriched (on average) the top 5% by £128,000 each but failed at its 'stated purpose' of increasing bank lending???

  16. Rob says:

    The analysis of QE is reasonable enough. Congratulations on the clear thinking there.

    In addition to what has been offered by the speaker there are very relevant facts that distinguishes the new QE money from that bank created money that was paid off when bank lending shrank as a result of loans being paid back by many borrowers who wanted to reduce their debt after the crisis.

    That reality is the fact that by any proper accounting new QE money added to the national debt since new money cannot be created without debt being created at the same time. That is because we are in a fiat money system.
    The sovereign money situation has a problem in itself although it would be better than the QE system since it would provide people with money instead of just some people.

    The whole idea of positive money is not necessary at all since the argument it is based on the need for people to have more money (purchasing power) to spend on things they need.

    The problem with government spending more money or the government issuing more money units (newly created additional money units) is that newly created money competes with existing money and puts upward pressure on prices due to the ever present price / demand / supply mechanism.

    The whole issue can be resolved by simply decreasing taxes since this would be a net same effect allowing people to have more money to spend as they see according to their need. This would be a much more effective solution since people know their own various intimate needs much better than some government (politicians) assuming that they know and making administrative decisions .

    The whole idea ignores the reality that the lack of money is not the issue but a lack of wealth is. Wealth consists of goods and services not increased number of currency units in an economy and measuring wealth involves measuring output in real terms, not in just money terms.

    If increases in the quantity of money were a real indication of wealth increases then those countries that had inceased their money supply the most would be the wealthiest when the reality is they are amongst the poorest.

  17. soal159 says:

    This isn't a new concept. The US already did this with the United States Note. The banks merely changed the law and flushed the currency out of existence. The speaker said that the two systems would live side by side but the Banks are more than aware of the effects and crush the idea before it gets a lobby in Parliament.

  18. Joseph Joseph says:

    Why not do away with the Bank of England altogether?

  19. Darryl Jackson says:

    This is the same shit that's happening in the USA

  20. casey X says:

    I'm glad (for all the wrong reasons) that this is a U.K. video/lecture. Conspiracy theorists – God bless – hopefully our US Federal Reserve is as sovereign as the Modern Monetary Theory proponents say, and we can end the "Fed-ish". #MMT

  21. Laureano Luna says:

    5:52 His argument that, as the crisis was caused by banks lending too much, encouraging banks to lend more after the crisis was nonsense is wrong: after the crisis, it was sensible to encourage banks to lend more even if a couple of years earlier it would have been sensible to check that lending: the context had changed dramatically from boom to recession.

  22. Steve D says:

    It's true that most of the money is created by banks in the form of loans, but the “positive money” people jump from most money to ALL money. The U.S. federal government created 3.8 trillion dollars in FY 2016, and NOT as loans. That money was not borrowed from anyone, nor lent to anyone. It was created out of thin air the same way that banks create loan money out of thin air: by crediting accounts. Federal money and loan money are both created in banks, but federal money is not loan money.

  23. thecomfortstation says:

    so the effective tax we pay is 56%…

  24. kunal singh says:

    Sometimes I wonder, informative videos like this has so many less views, whereas some stupid vlog counts millions. No wonder very less people are interested in improving the world and many are just hell bent on complaining.

  25. darrenrooke says:

    Money is a debt end of story. There is no way on this earths it’s not. If this money is put into the economy by the government. Who is the purchaser? So is the government buying houses. If not then explain your story in full context. You stop short of explaining the full process. There’s a reason for this and that’s because you’ve not thought it though. If you had you’d face palm and shut up.
    I mean let’s play this out.
    So the govenment pays a company to build houses. So when the house is sold is there an obligation to pay for said House. Well of course. So who are we going to pay. Well we would have to pay the govenment just like we pay the banks back.
    You cite interest as a problem so is this new money that’s coming from government by what system will it be delivered. In. Will we be using bank accounts by any chance. Will banks need paying for accounting for our accounts. Will the government be accounting for our accounts. If so this is going to have to be paid for one way or another.
    To me you’ve not identified the problem at all. Not even close. Your advocating a shuffling of the deck when the decks fucked.

  26. ric 63 says:

    Excellent. Should be compulsory viewing, then maybe, as someone once said, there'd be a revolution by the morning.

  27. steve says:

    You do not need the Central Bank at all. Merely issue UK Bank Notes by the Government and spend them into the economy provided you are creating goods and services, which will not increase inflation.

  28. Andy Jarman says:

    Australian government paid money directly into everyone's bank accounts. At least it kept us in work if only by churning money round and round the economy.

    Those economies still manufacturing 'things' like China began buying up Australian properties because Australia appeared a 'safer' option than US/UK.

    The consequence is more bloody property nobody can afford!

    So while we didn't end up sleeping rough we are still prey to command economies like China's whose own populations aren't/aren't able to play this silly game.

    I suspect corrupt post Soviet money is flooding London's property market, on top of the stock brokers sucking on the government's teat.

    Australia also set up a 'pink batts' subsidised home insulation scheme.

    Through poor regulation and certification of tradesmen four installers were electrocuted while installing insulation.

    The MP in charge of the scheme was lynched and crucified.

    Nobody asked why loft insulators didn't have to go through proper safety training.

    It was much more satisfying to bay for blood and start head kicking the easiest target.

    I suspect the banks had a word to the press about the best way of sticking the knife in.

    Still our banks are able to print money to 'compete' with prices being paid by the Chinese.

    This is all a symptom of a world economic hierarchy in transition. As the developing world's poverty decreases so our 'relative' economic advantage decreases.

    "Too big to fail" is the safest destination for money now, which is the only thing keeping western democracies afloat.

    As soon as the centre of gravity shifts a bit more the west followed by the east will start to loose faith in the whole sordid fairytale.

  29. Kyle Dolan says:

    How does money disappear from the economy when debt is paid off? Doesn’t the capital you use to pay off the debt( say mortgage), go to the bank which uses the capital, as well of the interest, to invest in the economy again?

  30. Dale Gaubatz says:

    We did not start using metal coins created by the kings. Before we used metal coins we used clay tablets and after the money creation process was hi-jacked by the people who owned the mines then we used metal coins and these mammon or money power gained from the system.

    The money power started this game thousands of years ago and started with metal coin because they owned the mines.

    Social credit seems vastly superior to quantitative easing.

  31. Anita Corbett says:

    Strength to you and your sane understanding of the mess and wilful greed created by people who are spending, the hard earned working class people's money, as though it was their own .

  32. LiuYe says:

    Sovereign money works. There will still be inflation. Nothing would change really. Just semantics. The current system assumes the govt is in debt to the public. But this is false since the govt can just tax the people, even its domestic bond holders to pay the money back.

  33. Deepu N says:

    This man has his head in the sand. The Bank of England and all the central banks are very fully aware of what the solutions are. The system has been built and these policies of printing more money and lowering interest rates are to drive up inflation and deliberately make the richest 1% richer and the rest of us poorer.The goal is to turn us into slaves totally dependent on the state. This is done by creating a bubble with excessive and easy lending that leads to a banking/debt crisis every 8-10 years until we are reduced to penury. The banks are bailed out, no banker goes to jail and taxpayers, teachers, nurses pay for it with reduced services such as cuts to our hospitals and social security. The system has to be overhauled, an end to fractional lending…..this will only happen with a revolt by the people. Our masters/rulers will not go politely as this system keeps them rich. But these politicians aren't really in control. It's the Rothchilds and the Rockefellers who are pulling the strings.

  34. Jelena Beroš says:

    great! good explanation! all countries in EU are lost monetary sovereignity…. sad… best regards from Croatia!

  35. The viKid Truth says:

    He is just not convincing me, not sure I have the time to complete this video. All I hear is talking points that have been regurgitated 100s of times before, which didn’t convince me then either

  36. Elumio Merk says:

    I really like how this sovereign money proposal can work side by side with the current monetary system, it is not a complete overhaul of the monetary system.
    complete overhaul is indeed scary especially with as big a game as banks. The Swiss had a referendum about it which failed, I understand as it would be too risky for the world's secret bankers.
    So I really like how this can be just a one time experiment that the government can do and see if it works well or not.

  37. Todor Dzhambazov says:

    Ben, you are an intelligent man, but if you put money in the financial market you actually give them to the companies' owners that own the majority of their shares. When you invest in shares you actually invest in the company. If the company gonna spend these money reasonably is another thing though. So the money is actually ''magically'' flowing from the financial market to the business. The companies that are big and are public of course, but they are actually the ones that move the economy. The others just work for them. So, money is flowing to them too. Non financial businesses are small firms like sole traders and limited companies. The thing that you are offering to put the created money straight to the non financial business is like making the government their main investor and work creator. I don't think governments do that anymore, except in totalitarian dictatorships. It just won't ever work.

  38. Benn Conner says:

    He didn’t talk about moving to a full reserve banking system to prevent the banks from creating any money.

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