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Hosted on Acast. See acast.com/privacy for more information.

Hosted on Acast. See acast.com/privacy for more information.

Hosted on Acast. See acast.com/privacy for more information.

Hosted on Acast. See acast.com/privacy for more information.

Hosted on Acast. See acast.com/privacy for more information.

In this episode of Debunking Economics, Phil Dobbie and Professor Steve Keen dive into the thorny world of “sovereign money” and “100% money” — two reform proposals that aim to radically reshape how modern banking works. Prompted by a listener email, the conversation unpacks why today’s system of bank‑created money, reserves, and government deficits is so convoluted, and whether a simpler, more transparent architecture is even possible. Phil sketches the appeal of a world where everyone holds an account directly at the central bank, bypassing the private banking system for everyday payments, while Steve explores what such a shift would mean for money creation, government spending, and the role of commercial banks.

As the discussion deepens, they examine the historical roots of these ideas, from Irving Fisher’s 1930s push for 100% reserve banking to modern proposals emerging from Switzerland and Germany. Steve highlights the technical and political challenges: how to separate the payment system from the credit system, whether banks could remain profitable without the ability to create money, and why double‑entry bookkeeping is essential to understanding any reform. Phil presses on the potential benefits — stability, simplicity, and a more direct way for governments to manage the money supply — while Steve warns that poorly designed reforms could unintentionally collapse the very financial system they aim to fix.

The result is a lively, accessible exploration of one of the most misunderstood corners of economics. Whether you’re curious about sovereign money, sceptical of private bank power, or simply trying to make sense of how money actually moves around the economy, this episode offers a clear and provocative guide through the debate

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In this episode, Phil and Steve take listeners on a guided tour through the mechanics of government bond markets — stripping away the myths, misunderstandings and textbook clichés that usually cloud the topic. Starting from a listener question, they explore why governments issue bonds in the first place, how deficits translate into reserves within the banking system, and why double‑entry bookkeeping is the only reliable way to understand what’s really happening behind the scenes.

Steve explains that when governments spend more than they tax, they create deposits in private bank accounts and matching reserves for the banking sector. Bond issuance doesn’t “fund” this spending — it simply prevents the Treasury’s account at the central bank from going into overdraft, because most governments have imposed legal restrictions on doing so. Phil pushes on the role of banks, reserves and the idea of “bond vigilantes”, while Steve clarifies the difference between the primary and secondary bond markets, and why private banks are never constrained by reserves when issuing loans.

The conversation also tackles common misconceptions: that banks lend out deposits, that reserves are part of the money supply, or that bond sales create new money. Instead, Steve shows how reserves move around the system, why they can only be used for interbank settlement or buying bonds, and how government deficits are the true source of reserve creation. The result is a clear, engaging walkthrough of a system that’s often presented as mysterious — but becomes surprisingly logical once the accounting is laid bare.

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In this episode of Debunking Economics, Phil Dobbie and Professor Steve Keen tackle the global obsession with interest rates. From Australia’s Reserve Bank to the UK’s faltering economy, they explore how central banks use rate changes as a blunt tool to manage inflation and growth. Phil highlights the real‑world pressures on households—mortgages, rents, and tax thresholds—while Steve dismantles the neoclassical models that underpin mainstream policy, exposing their unrealistic assumptions about consumption, altruism, and infinite planning horizons.

Together they reveal how rate hikes often enrich bondholders while squeezing ordinary borrowers, skewing income distribution and destabilising financial systems. The conversation ranges from Keynesian misinterpretations to modern monetary theory, questioning whether interest rates can ever be the fine‑tuned instrument economists claim. It’s a lively, critical look at the myths of monetary policy and the urgent need for alternatives that address capacity, inequality, and democratic accountability.

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In this week’s Debunking Economics podcast, Phil Dobbie and Prof. Steve Keen dive into the global water crisis under the banner “Trouble on the Waterfront.” They explore the paradox of Earth’s abundant water supply versus the tiny fraction that is actually accessible, highlighting UN figures that show billions still lack safe drinking water and sanitation. From the UK’s tight margins between renewable supply and consumption, to Australia’s surplus constrained by geography, and Iran’s alarming shortages that threaten the viability of Tehran itself, the discussion underscores how climate change and poor management amplify the risks. Along the way, they touch on desalination’s energy intensity, the embedded water footprint in consumer goods, and the stark reality that water scarcity is as much about distribution and governance as it is about absolute supply.

The conversation then pivots to the UK, where privatisation of the water industry has left infrastructure lagging. Keen points out that while the public sector once invested in long‑term projects like Kielder Reservoir, the private sector has built virtually no new dams since the 1990s, preferring short‑term profit over resilience. Together, they argue that essential resources like water and power require excess capacity and long‑term planning—something markets alone cannot deliver. With wit and urgency, the episode makes clear that water is the ultimate recyclable resource, but without effective stewardship, even countries famed for rainfall could face scarcity.

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