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Positive Money THE ISSUES HOW MONEY WORKS OUR PROPOSALS JOIN IN Our Proposals HOME » OUR PROPOSALS If we want to deal with the big social, economic and environmental challenges that we’re facing today, we should start by fixing money. Watch this short video to find out how > What We Need We’ve spent the last five years researching the problems caused by the current debt-based monetary system and how to fix them. This is what we think needs to change to fix our broken money system: 1. Take the power to create money away from the banks, and return it to a democratic transparent and accountable process 2. Create money free of debt 3. Put new money into the real economy rather than financial markets and property bubbles The End Goal: Democratising Money Ultimately, we think that the economy would be more stable and society better off if we completely remove the power that banks have to create money. These ideas have been around since the 1930s, but we’ve done a lot of work to update them for the modern financial system. You can find out more below: Report: Creating a Sovereign Money System Sovereign Money (Cover)(Report, 56 pages) This document presents a reform to the banking system that would remove the ability of banks to create money, in the form of bank deposits, when they make loans. It would transfer the ability to create new money exclusively to the state, creating what we have termed a ‘sovereign money’ system. Read more & free download In more depth: Will a sovereign money system be flexibile enough? Flexibility(Report, 20 pages) This paper outlines the full range of policy options that mean a sovereign money system can be as flexible, or inflexible, as the authorities want it to be. Read more & free download In more depth: Sovereign Money – Common Critiques http://positivemoney.org/our-proposals/creating-sovereign-monetary-system/ http://positivemoney.org/our-proposals/flexibility-in-sovereign-money-system/ There are a number of common objections and concerns with the proposal to switch to a sovereign money system. Here we deal with them in more detail. Read more BOOK: Modernising Money Why Our Monetary System is Broken, and How We Fix It. The product of three years of research and development, these proposals offer one of the few hopes of escaping from our current dysfunctional monetary system. It is detailed but accessible to non-economists. Buy Now & More Info Right Now: Making the Recovery Sustainable When we rely on banks to create most of our money, then the only way of getting more money into the economy – and allowing it to grow – is to encourage people to go further into debt. This is why UK government policy is focused on ‘getting banks lending again’ and encouraging people to borrow more for mortgages. But the financial crisis was caused by a huge build-up in private debt, so allowing that debt to increase even further could lead us into another financial crisis. What we need right now is to have a way of getting extra money into the economy, but without relying on households borrowing even more. This can happen if the Bank of England creates money and transfers it to the government to be spent into the real economy (rather than the financial or property markets). REPORT: Making the Recovery Sustainable Sovereign Money (Cover)Our Sovereign Money proposal explains how the Bank of England and the government could make the recovery sustainable by creating a relatively small amount of money and spending it into the real economy. This would lead to a boost in jobs and employment, and stop the current debt-fuelled recovery turning into another crisis. More info & download

.tm-main { width:100%; } If we want to deal with the big social, economic and environmental challenges that we’re facing today, we should start by fixing money. Watch this short video to find out how >

What We Need

We’ve spent the last five years researching the problems caused by the current debt-based monetary system and how to fix them. This is what we think needs to change to fix our broken money system:

1. Take the power to create money away from the banks, and return it to a democratic transparent and accountable process

History has shown that when banks have the power to create money, they create too much in the good times, causing financial crises, and then create too little money in the bad times, making recessions and unemployment even worse. They put most of the money that they create into house price bubbles and speculation on financial markets, and only put a small amount into businesses outside the financial sector. We simply don’t think that banks, with all their incentives and need to maximise their profits, can be trusted with something as powerful as the ability to create money. And it’s not enough to regulate them, because regulators have already failed to keep them under control, and there’s no reason why they should get it right this time around. We need to stop banks being able to create money. Instead, we want to see the power to create money transferred to a democratic, accountable and transparent process, where everyone knows:

who has the power to create money,
how much money they create, and
how that money will be used.

However this process is set up – whether it’s the Bank of England or a new committee that decides whether to create money – it must be accountable to Parliament and protected from abuse by vested interests. We also want to see safeguards that ensure that the right amount of money is created: not too much (causing bubbles and a financial crisis) and not too little (causing a recession).

2. Create money free of debt

Currently, banks create money when they make loans, which means that for every pound in your bank account, someone somewhere else will be a pound in debt. It means that almost all the money in the economy is effectively ‘on loan’ from the banking sector, and interest must be paid nearly every pound that exists. If we try to reduce our debts, money disappears from the economy, making it harder for others to repay their own debts. Instead, money should be created by the state, in the public interest, without anyone else having to go further into debt. This money would be spent into the economy through government budgets instead of being lent into the economy by banks, so it would stimulate the real economy, create jobs, and make it possible for ordinary people to start reducing their own debts.

3. Put new money into the real economy rather than financial markets and property bubbles

Most of the money that banks create goes straight into the property and financial markets, pushing up house prices and increasing inequality. This money doesn’t create jobs – it simply makes life more expensive and unstable for people. Instead, any newly-created money should be used to fund public spending, reduce taxes, or be distributed directly to citizens to spend as they choose. This means that the money will start its life in the real (non-financial) economy instead of getting trapped in financial and property markets. This will help the economy grow, creating jobs in the process.

The End Goal: Democratising Money

Ultimately, we think that the economy would be more stable and society better off if we completely remove the power that banks have to create money. These ideas have been around since the 1930s, but we’ve done a lot of work to update them for the modern financial system. You can find out more below:

Report: Creating a Sovereign Money System

(Report, 56 pages) This document presents a reform to the banking system that would remove the ability of banks to create money, in the form of bank deposits, when they make loans. It would transfer the ability to create new money exclusively to the state, creating what we have termed a ‘sovereign money’ system. Read more & free download

In more depth: Will a sovereign money system be flexibile enough?

(Report, 20 pages) This paper outlines the full range of policy options that mean a sovereign money system can be as flexible, or inflexible, as the authorities want it to be. Read more & free download

In more depth: Sovereign Money – Common Critiques

There are a number of common objections and concerns with the proposal to switch to a sovereign money system. Here we deal with them in more detail. Read more

BOOK: Modernising Money

Why Our Monetary System is Broken, and How We Fix It. The product of three years of research and development, these proposals offer one of the few hopes of escaping from our current dysfunctional monetary system. It is detailed but accessible to non-economists. Buy Now & More Info

Right Now: Making the Recovery Sustainable

When we rely on banks to create most of our money, then the only way of getting more money into the economy – and allowing it to grow – is to encourage people to go further into debt. This is why UK government policy is focused on ‘getting banks lending again’ and encouraging people to borrow more for mortgages. But the financial crisis was caused by a huge build-up in private debt, so allowing that debt to increase even further could lead us into another financial crisis. What we need right now is to have a way of getting extra money into the economy, but without relying on households borrowing even more. This can happen if the Bank of England creates money and transfers it to the government to be spent into the real economy (rather than the financial or property markets).

REPORT: Making the Recovery Sustainable

Our Sovereign Money proposal explains how the Bank of England and the government could make the recovery sustainable by creating a relatively small amount of money and spending it into the real economy. This would lead to a boost in jobs and employment, and stop the current debt-fuelled recovery turning into another crisis. More info & download

INFOGRAPHIC – The Current System vs. Sovereign Money

This infographic shows the main differences between the current dysfunctional monetary system, and how it could be… View now

INFOGRAPHIC: Quantitative Easing vs. Sovereign Money

This infographic shows how QE was ineffective, and how the creation of sovereign money by the state would have been up to 37 times more effective in creating jobs and boosting the economy.View now…

VIDEO: Democratising Money

Positive Money Founder, Ben Dyson, presenting at the 3rd annual Positive Money Conference “Modernising Money” on 26th January 2013 in London, explains the main principles behind the monetary reform proposals which offer one of the few hopes of escaping from our current dysfunctional monetary system. Watch now (33 mins)

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

Ben Dyson, Founder of Positive Money, presented at the Positive Money 2014 conference the Sovereign Money Creation proposal. This proposal offers a way to make the recovery sustainable, it could be up to 37 times more effective than Quantitative Easing in boosting GDP. Watch now

VIDEO: Why Quantitative Easing was a waste of £375 billion

In the years following the financial crisis, the UK wasted £375bn on a failed scheme to stimulate the economy and end the recession. This was one of the biggest missed opportunities in history. Watch Now (6 mins)

Date: 2025-04-06 Page is: DBtxt003.php txt00010752
Initatives Positive Money Positive Money ... THE ISSUES ... HOW MONEY WORKS ... OUR PROPOSALS
Burgess COMMENTARY Peter Burgess
Positive Money THE ISSUES HOW MONEY WORKS OUR PROPOSALS JOIN IN Our Proposals HOME » OUR PROPOSALS If we want to deal with the big social, economic and environmental challenges that we’re facing today, we should start by fixing money. Watch this short video to find out how > What We Need We’ve spent the last five years researching the problems caused by the current debt-based monetary system and how to fix them. This is what we think needs to change to fix our broken money system: 1. Take the power to create money away from the banks, and return it to a democratic transparent and accountable process 2. Create money free of debt 3. Put new money into the real economy rather than financial markets and property bubbles The End Goal: Democratising Money Ultimately, we think that the economy would be more stable and society better off if we completely remove the power that banks have to create money. These ideas have been around since the 1930s, but we’ve done a lot of work to update them for the modern financial system. You can find out more below: Report: Creating a Sovereign Money System Sovereign Money (Cover)(Report, 56 pages) This document presents a reform to the banking system that would remove the ability of banks to create money, in the form of bank deposits, when they make loans. It would transfer the ability to create new money exclusively to the state, creating what we have termed a ‘sovereign money’ system. Read more & free download In more depth: Will a sovereign money system be flexibile enough? Flexibility(Report, 20 pages) This paper outlines the full range of policy options that mean a sovereign money system can be as flexible, or inflexible, as the authorities want it to be. Read more & free download In more depth: Sovereign Money – Common Critiques http://positivemoney.org/our-proposals/creating-sovereign-monetary-system/ http://positivemoney.org/our-proposals/flexibility-in-sovereign-money-system/ There are a number of common objections and concerns with the proposal to switch to a sovereign money system. Here we deal with them in more detail. Read more BOOK: Modernising Money Why Our Monetary System is Broken, and How We Fix It. The product of three years of research and development, these proposals offer one of the few hopes of escaping from our current dysfunctional monetary system. It is detailed but accessible to non-economists. Buy Now & More Info Right Now: Making the Recovery Sustainable When we rely on banks to create most of our money, then the only way of getting more money into the economy – and allowing it to grow – is to encourage people to go further into debt. This is why UK government policy is focused on ‘getting banks lending again’ and encouraging people to borrow more for mortgages. But the financial crisis was caused by a huge build-up in private debt, so allowing that debt to increase even further could lead us into another financial crisis. What we need right now is to have a way of getting extra money into the economy, but without relying on households borrowing even more. This can happen if the Bank of England creates money and transfers it to the government to be spent into the real economy (rather than the financial or property markets). REPORT: Making the Recovery Sustainable Sovereign Money (Cover)Our Sovereign Money proposal explains how the Bank of England and the government could make the recovery sustainable by creating a relatively small amount of money and spending it into the real economy. This would lead to a boost in jobs and employment, and stop the current debt-fuelled recovery turning into another crisis. More info & download .tm-main { width:100%; } If we want to deal with the big social, economic and environmental challenges that we’re facing today, we should start by fixing money. Watch this short video to find out how > What We Need We’ve spent the last five years researching the problems caused by the current debt-based monetary system and how to fix them. This is what we think needs to change to fix our broken money system: 1. Take the power to create money away from the banks, and return it to a democratic transparent and accountable process History has shown that when banks have the power to create money, they create too much in the good times, causing financial crises, and then create too little money in the bad times, making recessions and unemployment even worse. They put most of the money that they create into house price bubbles and speculation on financial markets, and only put a small amount into businesses outside the financial sector. We simply don’t think that banks, with all their incentives and need to maximise their profits, can be trusted with something as powerful as the ability to create money. And it’s not enough to regulate them, because regulators have already failed to keep them under control, and there’s no reason why they should get it right this time around. We need to stop banks being able to create money. Instead, we want to see the power to create money transferred to a democratic, accountable and transparent process, where everyone knows: who has the power to create money, how much money they create, and how that money will be used. However this process is set up – whether it’s the Bank of England or a new committee that decides whether to create money – it must be accountable to Parliament and protected from abuse by vested interests. We also want to see safeguards that ensure that the right amount of money is created: not too much (causing bubbles and a financial crisis) and not too little (causing a recession). 2. Create money free of debt Currently, banks create money when they make loans, which means that for every pound in your bank account, someone somewhere else will be a pound in debt. It means that almost all the money in the economy is effectively ‘on loan’ from the banking sector, and interest must be paid nearly every pound that exists. If we try to reduce our debts, money disappears from the economy, making it harder for others to repay their own debts. Instead, money should be created by the state, in the public interest, without anyone else having to go further into debt. This money would be spent into the economy through government budgets instead of being lent into the economy by banks, so it would stimulate the real economy, create jobs, and make it possible for ordinary people to start reducing their own debts. 3. Put new money into the real economy rather than financial markets and property bubbles Most of the money that banks create goes straight into the property and financial markets, pushing up house prices and increasing inequality. This money doesn’t create jobs – it simply makes life more expensive and unstable for people. Instead, any newly-created money should be used to fund public spending, reduce taxes, or be distributed directly to citizens to spend as they choose. This means that the money will start its life in the real (non-financial) economy instead of getting trapped in financial and property markets. This will help the economy grow, creating jobs in the process. The End Goal: Democratising Money Ultimately, we think that the economy would be more stable and society better off if we completely remove the power that banks have to create money. These ideas have been around since the 1930s, but we’ve done a lot of work to update them for the modern financial system. You can find out more below: Report: Creating a Sovereign Money System (Report, 56 pages) This document presents a reform to the banking system that would remove the ability of banks to create money, in the form of bank deposits, when they make loans. It would transfer the ability to create new money exclusively to the state, creating what we have termed a ‘sovereign money’ system. Read more & free download In more depth: Will a sovereign money system be flexibile enough? (Report, 20 pages) This paper outlines the full range of policy options that mean a sovereign money system can be as flexible, or inflexible, as the authorities want it to be. Read more & free download In more depth: Sovereign Money – Common Critiques There are a number of common objections and concerns with the proposal to switch to a sovereign money system. Here we deal with them in more detail. Read more BOOK: Modernising Money Why Our Monetary System is Broken, and How We Fix It. The product of three years of research and development, these proposals offer one of the few hopes of escaping from our current dysfunctional monetary system. It is detailed but accessible to non-economists. Buy Now & More Info Right Now: Making the Recovery Sustainable When we rely on banks to create most of our money, then the only way of getting more money into the economy – and allowing it to grow – is to encourage people to go further into debt. This is why UK government policy is focused on ‘getting banks lending again’ and encouraging people to borrow more for mortgages. But the financial crisis was caused by a huge build-up in private debt, so allowing that debt to increase even further could lead us into another financial crisis. What we need right now is to have a way of getting extra money into the economy, but without relying on households borrowing even more. This can happen if the Bank of England creates money and transfers it to the government to be spent into the real economy (rather than the financial or property markets). REPORT: Making the Recovery Sustainable Our Sovereign Money proposal explains how the Bank of England and the government could make the recovery sustainable by creating a relatively small amount of money and spending it into the real economy. This would lead to a boost in jobs and employment, and stop the current debt-fuelled recovery turning into another crisis. More info & download INFOGRAPHIC – The Current System vs. Sovereign Money This infographic shows the main differences between the current dysfunctional monetary system, and how it could be… View now INFOGRAPHIC: Quantitative Easing vs. Sovereign Money This infographic shows how QE was ineffective, and how the creation of sovereign money by the state would have been up to 37 times more effective in creating jobs and boosting the economy.View now… VIDEO: Democratising Money Positive Money Founder, Ben Dyson, presenting at the 3rd annual Positive Money Conference “Modernising Money” on 26th January 2013 in London, explains the main principles behind the monetary reform proposals which offer one of the few hopes of escaping from our current dysfunctional monetary system. Watch now (33 mins) VIDEO: How to Fuel the Economy Without Increasing Debt, through Sovereign Money Ben Dyson, Founder of Positive Money, presented at the Positive Money 2014 conference the Sovereign Money Creation proposal. This proposal offers a way to make the recovery sustainable, it could be up to 37 times more effective than Quantitative Easing in boosting GDP. Watch now VIDEO: Why Quantitative Easing was a waste of £375 billion In the years following the financial crisis, the UK wasted £375bn on a failed scheme to stimulate the economy and end the recession. This was one of the biggest missed opportunities in history. Watch Now (6 mins)

Initatives Positive Money

Positive Money ... THE ISSUES ... HOW MONEY WORKS ... OUR PROPOSALS