The truth is out: money is just an IOU, and the banks are rolling in it

David Graeber • • March 18, 2014

The Bank of England’s dose of honesty throws the theoretical basis for austerity out the window

Back in the 1930s, Henry Ford is supposed to have remarked that it was a good thing that most Americans didn’t know how banking really works, because if they did, “there’d be a revolution before tomorrow morning”.

Last week, something remarkable happened. The Bank of England let the cat out of the bag. In a paper called “Money Creation in the Modern Economy“, co-authored by three economists from the Bank’s Monetary Analysis Directorate, they stated outright that most common assumptions of how banking works are simply wrong, and that the kind of populist, heterodox positions more ordinarily associated with groups such as Occupy Wall Street are correct. In doing so, they have effectively thrown the entire theoretical basis for austerity out of the window.

Read the entire article here.

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How USPS Could Save the Economy, Change Your Life

David Dayen • The Progressive Populist • April 1, 2014

Want to end recessions, reduce inequality, prevent fraud and help immigrants? It’s time to install postal banking

Ever since the inspector general of the US Postal Service authored a white paper endorsing the concept of postal banking, more advocates and policymakers have become intrigued. Postal banking is actually an old idea: Dozens of countries offer simple financial services through their posts, and here in America, Postal Savings Accounts served millions of customers from 1911-1967 (the post office still sells money orders today). But it could also fix a number of our current problems simultaneously, even ones you haven’t thought about. Here are 10 different applications of postal banking, in order from most to least obvious:

  1. Financial inclusion for low-income Americans
  2. Reducing inequality and boosting the economy
  3. Stabilizing the Postal Service
  4. A better way to deliver federal benefits
  5. A savings vehicle for the poor
  6. Bringing immigrants into society
  7. Preventing identity fraud
  8. Modernizing the payment system
  9. Safeguarding personal data
  10. Ending recessions

Read the entire article here.

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