In other words, @netbacker, savings are not needed for lending. The money for a loan need not be in the bank when the bank lends.
— Ann Pettifor (@AnnPettifor) September 29, 2014
Tuesday, 30 September 2014
Amazing news: we can have the £80bn new HS2 rail line for free.
Fuddie duddies like me have always been under the impression that if we want to make an £Xbn investment, we have to sacrifice £Xbn of current consumption, i.e. we have to save. But according to Ann Pettifor this is not the case (as I understand her). At least that’s the impression I get from this, which she tweeted today.
And on page 26 of her book “Just Money”, there is a paragraph all on its own which says “Savings are not needed for investment.” And that’s repeated on p.104 where she says “Under a well-managed banking system, and with the sagacious use of bank money, surplus wealth is no longer needed for loans and investment.”
I’ve contacted the Nobel prize committee to propose her for a Noble prize in economics. Will someone second that?