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James Skinner

James Skinner is an economist and emeritus chairman of the New Economics Foundation. He read PPE at New College, Oxford.

Politicians often fail to understand the fundamental difference between household economics and the national economic system. The difference exists because households have to manage as best they can on what they can earn or borrow, whereas Governments have it within their power to create new money. A recent poll of Parliamentarians, commissioned by Positive Money, asked questions as to how new money is created. One out of ten respondents gave the right answer, two said they did not know and the remaining seven gave the wrong answer. This is not surprising. It is probable that less than 10% of the public understands money creation. As Henry Ford remarked “It is well enough that people of the nation do not understand …