Saturday, January 11, 2014

Money as debt: a documentary

This short documentary provides an interesting description of monetary economics, more attuned to endogenous money and Chartal views of money than the mainstream of the profession.


  1. This documentary has a focus on the creation of money. It does not examine the destruction of money.

    Consideration of the destruction-of-money is essential to make a stable monetary system theoretically complete.

  2. This documentary has a focus on the creation of money. It does not discuss the destruction of money.

    A consideration of the destruction-of-money is essential if a stable monetary system is to be theoretically complete.

  3. I’m not sure about Matias’s suggestion that the description of money creation in the video is in any way at odds with “mainstream”. The way I’d put it is that the fact that a dollar of debt is created for every dollar of money created by commercial bank is a dirty little secret that mainstream has always known about, but has chosen to keep quiet about.

    As to Chartalism, that’s the idea that fiat money gains its value from the fact that government demands that taxes be paid with it’s (the government’s fiat) money. That’s not really related to the pros and cons of “debt-money”.

    Re Roger Spark’s suggestion that the video does not deal with the destruction of money, I haven’t watched the whole video, but videos of this sort (and there are dozens of them) normally mention that money is destroyed when anyone repays a loan to a bank.

    As to the idea that there is something wrong with “debt-money”, I’ve argued that banks will NOT CHARGE interest on the debt money they issue (if they do their costing properly), but they WILL CHARGE for administration costs. And the administration costs involved in having private banks produce money are higher than having central banks do the job. My reasons are here:


Godley-Tobin Lecture - Friday 1st March11:30am - 12:45pm

Please note the change in date and venue. Bob Rowthorn's Godley-Tobin Lecture. titled “Keynesian Economics: Back from the Dead?”  It...