This explains how the economy works, using a bathtub explanation.

1. Think of money ….
as water

2. CITIZENS
ENTERPRISES
GOVERNMENT
LOCAL AUTHORITIES
The economy, then, is
like a series of bathtubs.
Every month, citizens pay
their bills. The money
goes to enterprises,
government and local
authorities. As the
month progresses,
citizens continue to pay
out and have less and
less in their accounts.

3. CITIZENS
ENTERPRISES
GOVERNMENT
LOCAL AUTHORITIES
Time to refill!
As wages , benefits,
pensions etc., citizens
get money from
enterprises, the
government and local
authorities.
When you present it
like this, it looks as if
the amount of money
in the economy
is constant. As long as
it keeps circulating.
However…..

4. CITIZENS
ENTERPRISES
GOVERNMENT
LOCAL AUTHORITIES
Every time a citizen buys
a house with a bank
loan, more money is
added to the economy.
As the Bank provides the
loan without borrowing
money itself, more
money enters the
system.
Of course, the bank loan
hardly fills the bathtub
with water that can be
drained off. People
often buy things with
that money so you could
think of houses and cars
as bath toys sort of!

6. The amount of money tied up in property is huge. Many
have borrowed more money than they can pay off in
their lifetimes.

7. BANK
CITIZENS
ENTERPRISES
GOVERNMENT
LOCAL AUTHORITIES
So the system
looks more like
this, with
citizens paying
interest and
mortgage to the
banks every
month.
Note that the
money
”evaporates”
when the bank
debt is repaid

8. BANK
ENTERPRISES
GOVERNMENT
LOCAL AUTHORITIES
CITIZENS
’(example Sweden)
Monthly
350 Billion
SEK
Available
1700 Billion
SEK
Assets
4000 Billion
SEK
Citzens own the
enterprises and the banks
and it is the government
that represents them so
the model should look
more like this

9. So how can we tackle….
Unemployment?

10. CITIZENS
ENTERPRISES
GOVERNMENT
LOCAL AUTHORITIES
If citizens spent a little
more money each
month and if there were
incentives to employ
more people, more jobs
would be demanded.
From the model you see
that citizens need spend
only, say, 10% more to
stimulate employment.
When the jobless get
jobs they will start to
spend so it is only a
temporary measure.

11. Time
VAT S
Current
High unemployment, lower
VAT
HIGH EMPLOYMENT
RAISE VAT
VAT SURCHARGE EMPLOYMENT STIMULATION MECHANISM
EMPLOY-
MENT
100%

12. WAIT!
You say ….

13. There are so
many reasons
why that won’t
work

14. The richwouldn’t allow you
You know nothing about political economy
Companies would just import more

15. There are 7 billion reasons why we need
an economy that works for us, our planet
and future generations.
Join us. Join the dialogue.