The target the Money Creation Committee (MCC) is aiming to hit is decided upon by parliament, the members of the MCC are decided upon and approved by parliament (see above), and the MCC, and its decisions, are accountable to parliament. The MCC is also completely transparent – the minutes of the meeting and the voting records will be available to the public. So the MCC is a democratically accountable transparent public body with the remit to work in the public interest.
The alternative is the system we have now, in which the amount of money is decided upon by a group of unelected bankers. (As the financial crisis showed, interest rates are not a particularly effective tool for either constraining or encouraging banks to lend.)
Or, we could give the power to create money directly to politicians. We believe this would inevitably lead to a political business cycle, as politicians would spend too much, particularly in the run up to elections; hence the reason for an operationally independent MCC which nevertheless is still accountable to Parliament.
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Posted in: 3. The Positive Money proposals