The national debate on NAMA should be broadened to cover the issue of money creation for this is the root cause of many of the world’s problems today.

Contrary to popular understanding money is not created on a printing press at the national mint but on a computer screen at a banking institution whenever a loan is issued. Almost all money in circulation has been created in this way, created that is on the basis of a corresponding amount of debt. For every positive amount in one bank account there exists a corresponding negative amount in another. Money and debt are two sides of the same coin. If there was no debt there would be no money.

Crucially, since banks create only the principal and not the interest then at any one time there is insufficient money in society to pay off all the debts in society. The obligation to repay these debts forces a growth compulsion whereby each year the economy must grow in order to create the demand for new loans which in turn create the new money to repay the existing debts. We are, in effect, trapped within a money system that demands perpetual economic growth regardless of the social and environmental consequences.

There is a growing awareness, however, that the realities of climate change and declining resources mean that we must make a transition to a steady state economy. This will require the elimination of the growth imperative from our money system and the deployment of alternative means of exchange. Without these steps and without debate on the money creation process all other efforts to create a sustainable society will be undermined.