Neoliberalism has tricked us into believing a fairytale about where money comes from


The Conversation has the article Neoliberalism has tricked us into believing a fairytale about where money comes from.

There is nothing natural about money. There is no link to some scarce essential form of money that sets a limit to its creation. It can be composed of base metal, paper or electronic data – none of which is in short supply. Similarly – despite what you may have heard about the need for austerity and a lack of certain cash-generating trees – there is no “natural” level of public expenditure. The size and reach of the public sector is a matter of political choice.
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The question then becomes: if the state as represented by the central bank can create money out of thin air to save the banks – why can’t it create money to save the people?

For people who misunderstand money, or think they don’t understand money, here it is in a relatively short form. If you don’t know if you misunderstand money, read this, and compare it to what you think.

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