Comments by "" (@blackbulldog4897) on "Richard J Murphy" channel.

  1.  @antilunio  Austerity is always applied for the same purpose - to discipline the workforce. It's never necessary , it's always a purely political choice driven by ideology.
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  2. Their job depends on them not raising it.
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  3.  @faramir  Nonsense. Austerity is never necessary, its always a political choice. Regarding your tax/borrowing comment, I advise you to research how fiat money systems actually work.
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  4.  @davideyres955  Austerity is a dreadful policy for most of the electorate; it's never necessary, it's always a purely political choice based on ideology. It seems you fundamentally misunderstand how our govt fiscal ops (and our money system in general) actually works. The only borrowing the uk govt undertakes is via it's own bank, the BofE.
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  5. It's been this way since 1979. There's little prospect of anything material changing as long as neoliberalism is the dominant ideology.
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  6. MMT isn't something that's embraced or not embraced, it describes how our fiat money system works (particularly govt fiscal ops) now, today.
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  7. @andybrice2711  the Truss & LDI episode revealed how things work. She should have sacked Bailey but that would have given the game away so instead, she got the tap on the shoulder and was told "time to go". The legislation, Bank of England Act 1998, shows which is master and which is servant so the architecture is in place. All we need is a political system which will use it.
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  8. MMT doesn't "work" or "not work", it describes how fiat money systems work.
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  9.  @grolfe3210  MMT is not "adopted" or "applied"; if a nation has a fiat, floating currency then MMT describes how the money system works in that country.
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  10. We can't vote ourselves out of this.
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  11. No, not bankrupt, or anything like. The UK is a self-financing state.
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  12.  @hughwilliams5995  Fiscal health and fiscal sickness aren't the best way to look at things are they? Better to look at resources available to govt and how it's willing to use them (or not) for the public good.
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  13.  @paulsmith8693  They already have, they explained in their Quarterly Bulletin in Q1 2014 "Money creation in the modern economy".
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  14.  @nickbarton3191  Reality is the size of the national debt (the net financial assets in the private sector) isn't the most important thing about it, it's more important to ask who has it and why.
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  15.  @billrigg1324  You are confusing yourself, a currency user, with the government, the currency issuer.
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  16.  @krismacg5673  the "spreadsheet error" and "faulty analysis" leading to a mistaken conclusion, as promoted by Fry and others, is an attempt at excusing it. It's nonsense. Austerity is a political choice, it's never necessary. It's always used to discipline the workforce, normally after the capacity of the currency issuing state has been revealed.
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  17.  @carlosbtc999  interesting you think we have a socialist government. You don't seem to understand how our fiat money system works, maybe read the MMT core literature to bring yourself up to speed.
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  18. Same place all govt spending comes from: . Parliament authorises spending . HMT instructs the BofE to mark up accounts of recipients . New £s every time
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  19. @shauneden4229  it can't control inflation, it's almost exclusively a supply side issue. All the BofE can do is alter the price of money and that doesn't do anything at all to ameliorate supply side inflation. I could understand why people say "it's not owned and controlled by govt" etc. if there was any evidence to support that view but I haven't seen any, ever. I agree though, the BofE doesn't serve "our" purpose but that's because it's political masters ideology prevents it. This situation will continue unless and until we have a completey different political landscape to the current one dominated by neoliberalism.
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  20.  @rodpetrie1088  it seems you don't understand what the "debt mountain" you refer to actually is. It's the aggregate difference between the £s govt has injected into the economy via buying things/spending and the £s govt has drained from the economy via taxation etc. In other words, it's the net financial assets in the private sector. It's more important to ask who has it and why rather than lose sleep over its size.
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  21. Money is never the issue. The issue is always "what resources do we have and what do we want to do with them?" Money just moves them around.
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  22. Neoliberalism was arguably created by the Austrian bankers in the late 19thc but it was certainly coined by the WLC in 1939 and advanced by the likes of The Mount Pelerin Society et al since then. It isn't about a minimal role for the state, it's about a small state for thee but not for me.
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  23. @eightiesmusic1984  that's what I said 👍
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  24. The way out of it is to have a political entity which will use the resources available to it for the public good. Doesn't look likely at the moment .
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  25. We have a government which issues it's own fiat, floating currency; therefore it's self financing. Bonds are issued ex-post of spending and by political choice.
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  26. The idea of creditworthiness isn't applicable to a currency issuing govt with it's own fiat, floating currency. Yes, the £20bn "black hole" is a nonsense.
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  27.  @SlowhandGreg  Our problem isn't the rich not paying tax (of course they should, but not because we need their tax £s to pay for things - we don't), it's finding a political entity that will use the resources available to it for the public good.
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  28. @John-qd5of  that's the only way it works; govt buying things/spending injects new £s, taxation drains existing £s.
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  29.  @inthegutterstaringathestars  Richard often seems confused as to how our fiat money system works, particularly govt fiscal ops so I've no idea what his "ideology" is. We have a currency issuing govt which has never, except for the brief period after WWII, used it's currency issuing capacity to organise the resources available to it for the public good. Since that brief period, the entire political landscape of the UK has been utterly corrupted and the only available "ideology" is neoliberalism. As the old saying goes " if voting could change anything we wouldn't be allowed to do it".
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  30.  @grantbeerling4396  the BofE is subservient to govt. It's all political choice.
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  31. I'd rather see the government use the usual process when it wants to do something; include the spending in a Supply & Appropriation Bill and get cracking.
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  32. Even if it were possible it wouldn't make any difference to the amount of £s govt has to spend.
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  33.  @alexjeffrey3981  yes, austerity is generally three-pronged; fiscal, monetary and labour relations. We often see it after the capacity of the currency issuing state has been revealed. It's class war.
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  34. The UK govt is the sole issuer of the currency, it can never run out of £s.
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  35. Austerity has always worked, it does exactly what it says on the tin. It's purpose is to keep the workforce disciplined, it works every time.
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  36. They may educate kids about "household economics" but they will never educate kids about the capacity of the currency issuing state.
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  37.  @grolfe3210  You seem confused by the concept of fiat currencies. See if this can clear your confusion: Nixon took the USA off the gold standard in 1971 and effectively brought Bretton Woods to an end. Since then, every major economy has been running a fiat currency system. The descriptive portion of MMT describes how these fiat money systems work.
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  38.  @grolfe3210  it's clear one of of doesn't understand how our fiat money system, particularly govt fiscal ops, actually work today in the UK. Again, for the hard of understanding, MMT is not something you do or don't do, it's how things are in our fiat money system now, today, in the UK. "Just printing more money" as you put it is how govt spends every single day; whenever govt buys something/spends HMT instructs it's bank to mark up the reserve accounts of the retail banks of recipients of any spending, the BofE must by law comply with the instruction therefore new £s are created via balance sheet expansion. Govt spending injects, taxation drains. That's how it works now, today; that's what MMT describes. What's so difficult for you to understand about that?
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  39. As well as reading the core literature, I'd say the best and most accessibe way to understand that JG is in fact central to MMT and how it works is to read Bill Mitchell's "Essence of MMT"; it's a three part series.
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  40.  @physiocrat7143  Oh, right. To be clear, MMT isn't a theory. It's core is a description of how fiat money systems, including ours, work. It describes how govt has to exhale via injecting it's currency before it can inhale by collecting taxes. What do you mean by "non destructive tax system"?
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  41. As Minsky said "anyone can create money, getting it accepted is the difficult part".
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  42. MMT (the descriptive part) describes how fiat money systems work. Govt spending injects, taxation drains.
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  43. ​ @Tensquaremetreworkshop Every country with a floating fiat currency?
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  44.  @colsylvester639  I was asking him if he thought the collapse he's banging on about has happened to every country with its own fiat, floating currency; of course, it hasn't. These people have zero idea how fiat money systems work.
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  45.  @inthegutterstaringathestars  he often gets confused about tax too. Taxation can be used to redistribute wealth but it's not it's primary function. Tax isn't a funding mechanism for our currency issuing govt; our government is self financing. QE is a simple asset swap, reserves for Gilts; it simply reverses the initial transaction which swapped Gilts for reserves. My ideology is our currency issuing govt should use the resources at it's disposal for the public good. When was the last time you saw a Heterodox economist on MSM espousing the capacity of our currency issuing state?
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  46. Everyone close to HMT and the BofE understands how the money system works. Many others in power do too.
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  47.  @davideyres955  it's apparent you have no idea what MMT actually is so I suggest you read the core MMT literature before putting forward your incorrect ideas about what it is and isn't.
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  48. Our government doesn't "borrow" in the same way you or I do. It's the currency issuer so every time it spends/buys something it issues new £s (via instructing it's own bank to mark up accounts of recipients) into existence. Agree about the tax system.
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  49.  @leejohnson3209  I'd disagree. They know exactly how to make it work for themselves and their donors.
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  50.  @archvaldor  Except for the fact our currency issuing govt doesn't need to "balance the books".
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  51.  @c.j.griffin  MMT doesn't describe those things, it's not a policy regime (except for the Job Guarantee). It's a framework for understanding and explaining the capacity of a currency issuing state with it's own fiat, floating currency. Understanding the framework allows you to look at policy options using what's termed as the "MMT Lens".
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  52. I suppose the "big deal" is this: The UK govt faces no purely fiscal constraint, the only constraints it faces are availability of resources at a price it's willing to pay and politics. Therefore, when you hear politicians rolling out excuses like "there's no money for xyz", "where's the money going to come from?", "we can't afford it" etc, you know they are gaslighting.
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  53. @shauneden4229  it's clear the 1946 Act brings the bank under public control, the share capital of the BofE is owned by the Treasury solicitor on behalf of HMT. The 1946 Act, along with the Bank of England Act 1998 show exactly which is master and which is servant. So the BofE, owned and controlled by govt must, by law, comply with authorised requests from HMT. I've seen all the "it's not owned by govt etc." before but the legislation clearly shows who owns and controls it so I don't understand why people would say otherwise.
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  54.  @alexjeffrey3981  I've tried to reply four times now, each one has been delete. Seems like I'm hitting some kind of filter. I'll try again later.
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  55. Tax the rich (if you can) by all means but not because it will govt more £s to spend - it won't.
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  56. How about simply using the resources at it's disposal for the public good.
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  57.  @asumazilla  energy security, food security, better resourced NHS, education system, infrastructure etc Problem is we can only do what we can do, it's all about the people we've got.
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  58. I'm not sure what you mean. Spending comes via the supply process, taxation is laid out in the finance bill.
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  59.  @jonathanevans3024  "believer in MMT" = understanding how our fiat money system works, particularly govt fiscal ops, and the capacity of the currency issuing state.
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  60.  @charlesc266  sure, but the problem is, apart from a brief period after WWII, the economy has never "worked for everyone".
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  61. Well, either they do know how our fiat money system works and they are gaslighting OR they don't know how our fiat money system works. Which is worse?
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  62. The UK govt doesn't need to raise revenue to be able to spend, it's the currency issuer. Every time it spends it issues new £s into existence. Taxes exist for multiple reasons, primarily freeing up resources for govt to use and driving demand for the currency; revenue raising isn't one of those functions.
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  63. @adb9125  ah, right. In reality, the only borrowing the UK govt undertakes is via it's own bank, the BofE. Try to think of the "national debt" as the amount of £s govt has spent into the economy minus the £s it's drained from the economy via taxation. It's a different paradigm to the one we are normally exposed to but, unlike the normal narrative, it's correct and based on reality.
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  64.  @antonyjh1234  The so-called "national debt" is simply the difference between all the £s govt has injected via buying things/spending and all the £s it's drained via taxation. In other words, it's the net money supply, the net financial assets in the private sector. "Paying it back" means draining the private sector of it's net financial assets. All money is debt.
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  65.  @physiocrat7143  my point is every now and again someone who doesn't know what they are talking about will glibly roll out the "printing money causes inflation" line.
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  66.  @physiocrat7143  I'm telling you because you glibly rolled out the "printing money causes inflation" nonsense. That's analogous to saying "all money creation is inflationary" which, of course, is nonsense. It's more accurate to say"all money creation is potentially inflationary ". You seem unaware that all govt injected £s (except those which are saved) are withdrawn via taxation.
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  67. @physiocrat7143  Yes, taxation is poorly understood isn't it. I'm coming from what is often called the MMT perspective, I prefer to call it the fact based economics perspective in which the primary purpose of taxation is to free up resources for govt to use (plus drive demand for the currency etc.) The problem with taxation as it stands is it's more of a carpet bombing operation than a surgical intervention. As far as the value of sterling goes, the BofE is targeted to achieve 2% inflation annually so if the BofE hits it's target (which it hardly ever does, I wonder why 🤔) then it's bound to devalue isn't it. What ideas do you have for changing the tax system
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  68. @physiocrat7143  I've seen some people of an MMT persuasion posit a LVT may be acceptable but generally it's rejected by MMT folk, particularly in the UK. It's rejected because the point of taxation in the MMT paradigm is to free up resources for govt to use, govt doesn't have much need for land so why tax it? Agree with stamp duty, vat, cgt, it etc. if they don't free up resources, then why bother?
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  69. @physiocrat7143  I get it, LVT people are often evangelical (as, I suppose, MMT folk can be too). Sure, if a public project needs land then govt has the tools to be able to acquire it when it needs to. Well, taxation above and beyond that necessary for govt to provision itself is a very bad idea but, as I said before, taxation is more carpet bombing than surgical intervention so that's one of the reasons the Job Guarantee is core to MMT. The descriptive portion of MMT is descriptive, for sure. Don't forget the rest of it though 👍
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  70.  @grolfe3210 it's a pity you can't understand what I've explained. if you check back, you'll see I explained what fiat is and then outlined the basics of how fiat works in relation to govt fiscal ops. So, to answer your question: every single major economy with a fiat, floating currency (UK, USA, Jpn etc) has operated by, in your words, "printing vast amounts of money" since 1971 at least. It seems you don't understand what QE is either; it's not a funding mechanism for govt, it's a simple asset swap - reserves for Gilts. It simply reverses the initial transaction which swapped Gilts for reserves.
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  71.  @grolfe3210  Hmmm, there's an awful lot in there, particularly your support form Friedman's "QTM" ... it's been debunked multiple times and he distanced himself from his own theory, but you know all that, right? We can come back to Zim etc later, and QE. Also, it seems as though you have come to understand my earlier posts about MMT being a factual description of how fiat money systems work and not something you adopt or don't adopt, so well done there! For now though, can you explain how ecatly, in your view, "you print another £100" which would double the money supply, why this would happen and why suddenly everyone would want buy a house?
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  72.  @adenwellsmith6908  really, you are still using "the dog ate my homework excuse" 😂 If you had read the core literature and understood it then you wouldn't be posting this guff, so ... Go and read the core literature and, if you can understand it, you'll realise what nonsense you've been posting. Come back when you've read it 👍
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  73.  @dboynette  we have a currency issuing govt, it's self financing. Simplified, every time it buys something/spends it instructs it's bank, the BofE, to mark up accounts of recipients; new £s created every time.
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  74.  @kaz4845  you're right, there's no need to issue bonds, it's a political choice. It's true to say govt neither has nor doesn't have £s, it issues them into existence every time it needs them.
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  75.  @dboynette  it really doesn't matter who owns the debt as it's all denominated in £s.
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  76.  @piccadillyvision3761  No-one can be seen to overrule the BofE, it would give the game away. Even the PM wasn't allowed to do it, even though all the necessary legislation is in place.
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  77.  @peterweston1356  it's important to realise that roughly 10% of the £s govt injects into the economy is saved, not spent. So, for every £100 govt injects the national debt increases by around £10. Money doesn't circulate, it's an injection (creation) and drain (delete) model.
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  78. We need to get away from the idea of "fiscal rules" altogether as it's starting from the wrong place.
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  79.  @count-beany  Sure, there are other factors involved but interest rate setting is a fundamental, it's the mechanism used to attempt to regulate the money supply and cause enough unemployment for any inflationary pressure to be relieved. I'd recommend reading the core literature to get a fuller understanding of what MMT actually is then, once you have the basics, maybe read Bill Mitchell's Essence of MMT series and see what you think.
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  80.  @count-beany  the MMT framework asserts the base rate should always be set to zero (or close to). The MPC is a nonsense, it's completely under the control of govt; it's govts way of being able to point and say "it wasn't us, it was them".
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  81.  @katiecannon8186  yes, my fellow traveller, I agree. Many don't realise that private sector credit creation is a political choice.
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  82. @katiecannon8186  potentially, yes but I don't think we're allowed to say that are we.
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  83. Imagine thinking there's such a thing as "free markets" and government doesn't control and regulate markets.
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  84. Can you explain what you think ZimWei etc have to do with anything I said?
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  85.  @therealrobertbirchall  No, that's not the case at all; MMT doesn't "work" or "not work". If a country has it's own floating, fiat currency then the (descriptive part of) MMT describes the money system in that country. That's it.
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  86. The Act you are looking for is the The Exchequer and Audit Departments Act 1866, sections 13 & 15 are the important ones. To answer your second question, government doesn't "have to auction Gilts", it chooses to. Gilts aren't a funding operation, they are a refinancing operation.
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  87. Sort of. All govt spending, which is "borrowed" from it's own bank, is returned to the issuer; except that which is saved. These savings are what's referred to as the national debt.
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  88.  @garysmith5025  Well, whatever we can do we can afford is a truism. Why do you think all spending has to be balanced by taxation?
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  89.  @garysmith5025  Taxation has multiple functions, primarily to drain demand so there are resources available for govt to use, drive demand for the currency etc. I'm of the opinion our govt should use it's fiscal power to organise the resources at it's disposal for the public good. Taxing the wealthy probably won't do anything productive at all.
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  90. The Bank of England Act 1946 disagrees with you.
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  91.  @chrisnew5724  Of course they understand the powers they have, they use them all the time. Whether they use the ones we want them to use, in the way we want them to is another matter.
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  92. ​ @milkybaravenger given the UK is a currency issuing state, credit ratings are not relevant in any way. All, that's all, govt spending is via HMT instructing it's own bank (the BoE) to mark up the reserve accounts of recipients retail banks. The UK govt is the sole issuer of £s, it never needs to "borrow" £s from anywhere or anyone except it's own bank.
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  93. @andybrice2711  There's no doubt about the legislative position, the BoE is completely under political control. The Bank of England Act 1998, particularly sections 1, 1a, 12 (in relation to section 11) and 19 show exactly which party is master and which is servant. Sacking Bailey would not have been allowed as it would have given the game away.
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  94.  @evildrome  Sure, govt could provide liquidity. Private credit creation is a political choice.
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  95. Ex[orts are a cost, it's us sending real resources out of our country in return for someone's digital tokens.
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  96. How do you think govt fiscal ops work on a day to day basis? What power do you think the IMF has over our sovereign government?
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  97.  @Tensquaremetreworkshop  Correct, the IMF has zero power over the UK govt. So, why would a govt with it's own fiat, floating currency ever need the IMF for anything at all?
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  98. MMT doesn't "prevent" anything, it's a description of how fiat money systems work, particularly govt fiscal ops. The "overdraft" is simply the amount of £s the UK has issued into existence but not yet taken back via taxation.
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  99.  @SlowCarToChina  UK govt is the sole issuer of £s, it never needs to raise revenue to spend it simply issues £s into existence every time it buys something; the other side is that the UK govt "deletes" £s every time it taxes. The only place £s can come from is govt injecting them, via buying something, into the economy. Whenever parliament passes a Supply and Appropriation Bill then the spending within it cannot legally be prevented; that's the source of all £s (we'll ignore bank credit for now). So, £s are never the issue; it's always resources, people mostly. There's no "black hole", that's pure obfuscation and the govt saying "we don't want to spend on these things". There is an "overdraft" but it's nothing like an overdraft you or I would have. There's enough productive capacity in the UK for everyone to have a job, a house and a pension without inflation being a problem; as ever it's a question of political priorities. Interest rate rises? Would you say they are an injection or a drain?
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  100.  @SlowCarToChina  I was referring to interest rates being an injection or drain in terms of govt spending. For example, in December 2023 interest payments on govt debt (it's a purely political choice to pay this interest) had increased by 4% of GDP since 2020; more than energy subsidies and standard benefit increases combined.
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  101.  @mikebrough3434  oh right, I understand what you mean. Pretty much every anti MMT "article" I've ever read is a strawman. The thing is, all of the people who have been supporting the "tax/borrow", "there's no such thing as public money, there's only taxpayers money" narratives (which are obviously completely false) all their professional lives simply don't have the capacity to admit they have been wrong their entire professional lives. Plus, they wouldn't have the jobs they have if they didn't support those nonsensical ideas. Hence the farcical attempts at "pushback" against what is observable fact.
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  102. Debt (£s still in the economy) does matter, more in terms of who has them and why than overall size. If one country has less govt "debt" than another it simply means there's less of one countries currency in that economy than the other.
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  103. What's the mechanism for the World Bank overruling the UK parliament?
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  104. MMT isn't something that's subscribed to or not, it describes how our fiat money system works, now, today.
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  105.  @Redf322  UBI is a truly dreadful idea. It's a direct transfer from govt, a state benefit for everyone, it would be absorbed into higher prices. That means poor people are still poor, they simply have bigger numbers in their bank account.
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  106.  @adenwellsmith6908  And ... your assertion displays a fundamental misunderstanding of how fiat money systems work as the observable reality is ... the government can never run out of purchasing power (£s), it's the sole issuer of the currency, it can never run out of £s. You are confusing real resources with £s.
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  107.  @charliemoore2551  It wouldn't, it's a completely daft idea.
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  108. When govt pays interest on its debt then the Gilt holders receive the payment. If the Gilt holder happens to be the govt own bank, the BofE, then it's the BofE receives the payment. It's a wash as the BofE has to submit all profits to HMT.
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  109. QE doesn't pay for anything, it's an asset swap; Gilts for reserves. It reverses the original transaction which swapped reserves for Gilts.
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  110. It's observable fact, it's how govt fiscal ops work every day. No need for any kind of belief system unless, of course, you are attempting to deny observable reality.
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  111. Couple of things to note: 1. Interest rates on debt and issuing debt itself is a purely political choice 2. The "debt" is simply the amount of £s govt has spent into the economy but not yet taken back via taxes. It's the net money supply. 3. The only "borrowing" the UK govt undertakes is via it's own bank, the BofE.
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  112.  @stephenhookings1985  £s can never leave the Sterling area. The name tags on them may change but they can never leave unless they are taxed out of existence. As for how they are eventually distributed, well, we all know the answer to that, don't we.
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  113. The £ is a fiat (not commodity), floating (not fixed/pegged) currency.
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  114.  @kevinsyd2012  No, it's not. The MMT view is the primary purpose of taxation is to free up resources for the public sector to use.
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  115.  @kevinsyd2012  Well, taxation/fines etc offset govt spending. "Taxes in MMT, in addition to their redistributive and allocative functions (dissauding people from smoking etc), are an essential tool in allowing governments to pursue a spending program without pushing nominal spending growth ahead of the real productive capacity of the economy." The BofE creates £s, via balance sheet expansion, every time govt buys something/spends whether it's for public services or not.
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  116.  @kevinsyd2012  Well, taxation is paid into the Consolidated Fund so it offsets govt spending. Read some Bill Mitchell on the MMT view of the purpose of taxation.
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  117. MMT describes how fiat money systems work, now, today. The BofE is not independent in any way from govt.
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  118.  @theolddog5129  It addresses your statement regarding interest payments "going out of the UK"; truth is, £s can never leave the Sterling Area. Yes, we import more from China than we export to them, that's true. However, for a Chinese company to be able to sell it's products to the UK market it must accept £s and it must have a sterling account at a retail bank to be able to accept these £s. There's no "borrowing" from China going on here, all that's happening is Chinese companies are swapping their real resources for our digital tokens i.e £s.
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  119. Check the Whole of Government Accounts.
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  120. our government creates new £s every time it bus something/spends, that's every day.
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  121. Gary would be more useful if he understood how the money system works; he still thinks taxes fund government.
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  122.  @alexjeffrey3981  Austerity doesn't necessarily mean spending cuts in the aggregate; it's primary purpose is to discipline the workforce.
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  123. ​ @alexjeffrey3981  It doesn't seem to like my comments as yt has deleted them three time now I think. try again in shorter form ... The UK govt is the sole issuer of it's own fiat, floating currency - Sterling, the £. It can never run out of £s, it issued them into existence every time it spends.
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  124.  @colincampbell4261  this is correct, it's a direct transfer from those under a certain age to those over a certain age.
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  125. @garethhumphries4039  the BofE isn't independent, have a look at the Bank of England Act 1998. MMT is a framework, part description of fiat money systems, part prescriptive (Zirp, JG) part "lens" for analysis of policy choices.
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  126. Which parts of the core MMT literature led you to believe MMT has anything to do with "printing boundless money to solve every ailment in the economy" ?
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  127. Imports may become more expensive if the value of the £ falls, it's not guaranteed and assumes the UK always has to be a price taker.
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  128. MMT doesn't predict anything at all. It's a framework for understanding and explaining the capacity of the currency issuing state.
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  129.  @jardenc  The fact is, the government can never run out of £s. It issues them into existence every time it buys something.
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  130. Try to think of things in terms of stuff (real resources) rather than £s. For example, how would simply handing out £s to people in poverty make more stuff available?
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  131. Tax revenues (from the French "return") aren't redistributed, taxation drains previously issued £s from the economy.
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  132.  @enjoyyourclassicbyrg2319  please explain how it's totally incorrect, reference any legislation you believe supports your argument, be specific.
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  133.  @enjoyyourclassicbyrg2319  ok, so you can't explain how it's incorrect or provide any supporting legislation. Fair enough. To address your points: 1. The point of taxation is to drain demand from the economy. 2. Only the BofE, under instruction from HMT, can issue the currency into existence (retail banks are licensed to issue credit denominated in £s) 3. It means when govt buys something/spends it issues £s via it's own bank into existence (an injection of £s into the economy), when it taxes it drains £s from the economy. If you don't understand what injections and drains are then I don't know what to say to you. 4. The Supply and Appropriation Acts (Main Estimates), Supply and Appropriation Act (Anticipation and Adjustments), Exchequer and Audit Departments Act 1866. Honestly, please stop digging yourself into a silly place.
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  134.  @enjoyyourclassicbyrg2319  1. No, taxation isn't redistributed. It's paid into the Consolidated Fund where it offsets govt spending. 2. The BofE issues £s under direction from HMT. 3. Economics 101, govt spending injects, taxation drains. If you don't understand what that means you shouldn't be in discussions like this. 4. Legislative architecture is the Supply process (2 Acts of Parliament) and the Exchequer and Audit Departments Act 1866. Honestly, please stop digging yourself in a silly place.
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  135. The Bank of England is wholly owned by the UK govt.
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  136.  @davideyres955  Can you explain how MMT scoots around this?
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  137.  @stephendavis5530  It's true that some inflation has been caused by price gouging post covid, ukraine etc. but inflation is rarely a simple matter. Interest rates merely transfer wealth upwards and increase the amount government spends so, in effect, they add £s to the economy. Generally, the relationship between rates and inflation isnt straightforward, blairfix has written extensively on the subject.
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  138. The Bank of England Act 1946 & the Bank of England Act 1998 disagree with you.
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  139. @jasonbradley7365  our government thinks it's a good idea to manage the economy via the price of money (interest rates); it's not. To that end, it tells it's own bank to set a floor interest rate, the bank rate. This is the rate it wants to maintain to, as it thinks, best manage the economy. To maintain this rate it decides to ensure that govt spending has no net effect on the level of reserves in the banking system. So, on days where it injects more reserves than it drains it issues securities (at a higher rate) to drain the excess reserves.
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  140.  @theolddog5129  the impact of not balancing govt spending with taxation is the ability of the private sector to save.
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  141. @theolddog5129  I'll take one thing at a time: . It really isn't any more than that. For example, govt buys something for £100 today that £100 circulates around the economy, I save £10, the rest is spent and returns to the issuer via taxation So, govt spent £100, I saved £10 of it £90 was returned via taxation; net effect is govt deficit increases by £10. . External lending for what? The UK govt only ever "borrows" from it's own bank, there's no dramas there. . Why would the fx rate or inflation rate fluctuate based purely on the amount of net financial assets (savings) in the private sector?
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  142. Why do you mention rolling over debt?
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  143. @adb9125  it's not "borrowing" in the sense we normally understand it, it's simply the govt being in debt to it's own bank. How do you think the above can "devalue" £?
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  144. @JibbaJabber  what £1 will buy you at any particular time depends on multiple factors, in terms of imports it's a floating currency. However, £1 will always be worth £1 in terms of your tax liabilities.
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  145. @adb9125  I can understand why you might think that but it's not an appropriate way to frame things. By that logic the $ should be worthless (as there's far more of them in existence than any other currency) shouldn't it? Also, don't forget about the endogenous credit money creation by the private sector - it increases and decreases all the time.
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  146. @adb9125  why would it?
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  147.  @JibbaJabber  the £ and, for example, the $, ¥ etc. are floating currencies. The rate of exchange between them depends on demand between any pair. Something like 90% of FX activity is speculation. Do you think, for example, currency traders look at M1 (or whatever series they decide upon) and think "there's more of of those this week/month so I'm going to short them?"
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  148.  @adb9125  every country with its own fiat floating currency operates in the same way. The institutional arrangements may differ but it's all the same kind of operation.
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  149.  @JibbaJabber  You are making some category errors. Firstly, fiat currencies are not commodity based, therefore they cannot be "devalued". Secondly, floating currencies float; they aren't pegged as, if they were, they wouldn't be floating currencies would they? What tools do you think, in the age of fiat floating currencies, the BoE uses to manipulate/peg the exchange rate?
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  150. @JibbaJabber  it's not I who is confused, if they are "given", why are you talking about "devaluing" a fiat currency and the BoE manipulating/pegging the fx rates. You seem to have forgotten we left the gold standard in 1931 and BW ended in 1971. Traders? Who knows what they think. I suggest you read some Oberlechner and the investigations on fx traders "habits".
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  151.  @JibbaJabber  I think we can forgive you for not noticing lots of things, particularly that fiat, floating currencies (such as the £, $ etc.) cannot be "devalued" as you seem to think they can because, guess what, they float! If you can't or won't understand that simple truism then I don't know what to tell you. The record shows it was you, not I, who introduced city FX traders when you said this, and I quote: "Are you telling me city forex traders don't follow such news in the dealing rooms?" But, no drama, I'll forgive you for not noticing that either. Ok, so now we've got those things out of the way and you've been forgiven for them, what "value" in $ or Yen or whatever do you think the £ should have? What, in your opinion, is the correct exchange rate between the £ and other currencies?
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  152.  @JibbaJabber  We'll have to forgive you for lots of things, not least your confusion around floating currencies. You are still clinging to the "devaluing" idea and really don't seem to understand that fiat, floating currencies cannot be devalued because, well, they are fiat (not commodity) and they float. If you can't or won't understand that then I don't know what to say to you. Now we've got that out of the way, what do you think is the "correct" exchange rate for £ v $ or £ v Yen? For the OP, do you see the exchange rate v $ or whatever falling every time a bank issues a loan or rising every time a loan is paid off?
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  153.  @JibbaJabber  Youtube keeps deleting my replies, wonder why?
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  154. ​ @JibbaJabber  I'll try again. We'll have to forgive you for quite a lot it seems. Particularly for not understanding f/f currencies cannot be devalued because, well, they are fiat not commodity based and, well, they float. What do you think the correct level for £v$ or £ v Yen or Euro is? Here's what I'll say to the OP, the significance of which will obviously elude you: Do you see or expect to see the £v$ rate drop every time a bank loan is made? Do you expect to see the £v$ rate rise every time a bank loan is repaid?
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  155.  @JibbaJabber  YT keeps deleting my replies. So I'm going to ignore your fundamental ignorance and ask you and the OP some questions. What do you think is the appropriate level for $ v £? OP: Do you see (or expect to see) the £ fall against the $ when a bank issues a loan? Do you see or expect to see the £ rise against the $ when a bank loan is paid off?
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  156. @JibbaJabber  I think we'll have to forgive you for quite a lot. The £ is a floating currency , it's value against other currencies "floats", it's also a fiat, not commodity based, currency so it cannot be devalued as you mistakenly asserted. Now that's out of the way, what are these "market forces" you refer to?
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  157.  @antonyjh1234  the "top of the bucket" or tap, if you like, is government injecting new £s into the economy by buying things aka spending. These new £s circulate around the economy and those which are spent attract taxation and are returned to the issuer. Those which are saved remain in the economy until they are spent. The hole at the bottom isn't plugged, unless you class those savings I referred to as being plugged.
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  158.  @antonyjh1234  that's exactly what I said.
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  159. @antonyjh1234  I may have misconstrued the part of your post which said "then govt spending has to stop otherwise money builds up..."? Yes, agree, taxes are the method by which £s return to the issuer and drain demand but savings are a drain of a different kind.
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  160. Govt pays interest on its debt by political choice. It's policy is to refinance any deficit by issuing HMT securities (Gilts etc). If it chose not to issue HMT securities then any deficit would reside in the Ways and Means Account at the BofE and attract the bank rate. BofE is wholly owned by the UK govt and it must remit all profits to HMT.
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  161. Jesus, Mary, Joseph and the wee donkey! Still banging on about the govt having to tax to raise revenue! Give it a rest. When's your next video on MMT coming out?
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  162.  @foxmoongaze  MMT isn't theoretical, it's observable fact.
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  163.  @foxmoongaze  Thanks for confirming you have zero idea how our fiat money system works. As you were!
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  164.  @foxmoongaze  I don't have to say anything at all about the depths of your ignorance regarding the subject under discussion, you've laid it out for all to see. I hope you feel better for the education you've received here.
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  165.  @foxmoongaze  You are welcome. Maybe take some time to research how our fiat money system actually works, at least then you might avoid the schoolboy errors like "it won't work"etc. Now, off to your homework assignment!
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  166. I'd agree, they are political objectives. However, fiscal rules are the wrong way of looking at things for a currency issuing govt like the UK. The only borrowing the UK government undertakes is via it's own bank, the BofE.
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  167. @markmirfin4972  hmm, we'll have to go back to basics regarding how govt buys things/spends, DMO etc. Firstly, all govt spending is new £s. Simplified, here's the process: . Parliament authorises spending via the Supply and Appropriation Bills - normally. . HMT instructs BofE to mark up the reserve accounts of recipients retail bank . BofE must, by law, comply so it marks up the relevant reserve accounts . Retail banks of recipients then mark up the relevant deposit accounts . New £s every time Later, the DMO issues securities to ensure the level of reserves in the banking system remains the same. This is a policy choice.
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  168. Funding is never the issue, the UK gov can never run out of £s. The problems/questions are always: . do we have the resources to do what we want to do? . does the govt have the political will to do it?
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  169. Consider the decision to stop WFP and the decision to give Ukraine £3bn pa "for as long as it takes". All govt decisions around spending are driven by ideology.
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  170. Where did you get the 97% figure from?
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  171.  @Nhoj737  do you know where he gets the 97% figure from? If you look at the available figures for the UK it looks more like 45/55 CB/retail banks if you compare ons releases and BoE "Money and Credit Tables".
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  172. Because they choose to use interest rates (the price of money) as the primary tool for attempting to manage the economy.
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  173. @carlton7015  Well, they instruct their bank to mark up the reserve accounts of recipients retail banks which the bank does; it also marks down the Consolidated Fund by the same amount - this is where the "borrowing" arises. Unfortunately for us, the UK govt believes the best way to manage our economy is via the use of interest rates so that's exactly what they try to do.
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  174. @carlton7015  we pretty much have that already. Why do you want to get rid of everyone's savings?
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  175.  @carlton7015  Simplified, Reserve accounts are the mechanism by which the BofE interacts with retail banks, each retail bank has a "reserve account" with the BofE. The Consolidated Fund is the equivalent of the government current account; it's the legal/accounting structure from which all payments are made and into which all receipts are collected.
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  176.  @carlton7015  that's not how it works. Issuing securities and paying interest on them are political choices.
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  177.  @carlton7015  please explain
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  178.  @carlton7015  it's not financial, it's a policy choice. Gilts aren't a funding operation, they are a refinancing operation, they are issued ex-post of spending. If govt didn't issue securities then any deficit would reside in the Ways and Means Account as a non tradable entity at the bank rate. Issuing Gilts refinances any deficit at a higher rate. The idea behind issuing securities is to drain any excess reserves injected by prior govt spending.
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  179.  @carlton7015  You've misunderstood. Simplified, the process works like this: . Parliament authorises spending, normally via the Supply process . When government comes to buy things/spend it instructs it's own bank (the BofE) to mark up the reserve accounts of recipients retail banks . BofE must, by law, comply so it marks up the reserve accounts and marks down the Consolidated Fund - this creates new £s every time . Retail banks then mark up the deposit accounts of recipients Nothing else needs to happen, all payments have been made via the creation of new £s and all those new £s are sitting in reserve accounts and deposit accounts of recipients. By default, at the end of day, any deficit will reside in the Ways & Means Account at the BofE. By political choice the government later issues securities for any deficit or buys securities for any surplus. These securities convert any deficit from a non tradable entity in the W&M Account (at the bank rate) to a tradable commodity at a higher rate. The UK government isn't a "private business" its the currency issuer, the only entity legally allowed to issue the currency; it neither has nor doesn't have £s, it issues them into existence every time it needs them.
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  180. @carlton7015  well, govt neither has nor doesn't have £s, it issues them into existence when it needs them. It issues £s into existence every day. Don't forget the other side of the system, the drain. Govt also drains £s from the economy every day via taxation. Monetary policy redistributes £s upwards.
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  181. The PM poll showed 85% of MP's didn't understand how private sector credit creation works. It also showed 70% understood govt creates new money. Swings and roundabouts.
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  182. Going back to the gold standard almost certainly won't happen and, if anyone was stupid enough to do it it wouldn't survive contact with reality. The UK doesn't need permission from anywhere except it's own parliament to create it's own currency.
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  183. If the deficit was left (as it would be by default) in the ways and means account instead of it being refinanced via HMT securities then the rate wouldn't really matter to govt as all BofE profits are remitted to HMT.
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  184. ​ @count-beany You are welcome my friend, happy to help wherever I can. I'm always happy to discuss these matters with anyone who has an open enough mind to challenge the nonsensical orthodoxy. You are correct about the profit/loss point but, in reality, it doesn't matter as govt is the currency issuer; it neither has nor doesn't have £s. Your point on govt debt interest: consider this... If BofE holds Gilts via QE then the BofE receives the coupon payments. If the coupon payments contribute to BofE profits they are remitted to HMT, it's Alice in Wonderland. When govt issues HMT securities to refinance any deficit it's making a political choice; that political choice is to give rich people free money. Given the above, consider this: Government Interest payments have increased by over 4% of GDP 2020 and Q4 2022. That's more than energy subsidies and benefit increases combined. I agree with you regarding inflation, it's almost always a supply side issue, normally energy. Regarding interest rates, an understanding of MMT would lead you to realise the bank rate should be set to zero or close to it then let the credit mark compete on that basis. The money supply is completely endogenous.
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  185. Maybe ask yourself what the difference is between a Gilt and a bank deposit?
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  186.  @Baxwell.  Well, all spending is potentially inflationary. Govt interest payments are no exception, particularly when you consider the forward pricing channel. Gilts are sold to people who have money they don't want to spend. Gilts are also very liquid so, when the Gilt holder decides they want to spend their money they can sell it to someone else who wants to save their money via Gilts. I suppose the point I'm making is £s in a bank deposit, or your pocket, and Gilts are all forms of money.
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  187.  @Baxwell.  Ok. I'm always happy to help but first I need to understand exactly where you are in terms of understanding govt fiscal ops in a fiat money system such as we have in the UK. So where would you say your knowledge is?
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  188.  @Baxwell.  So you understand fiat and govt fiscal ops, great! I'm not sure what you mean by "behaviour of banks" maybe you could explain more? You understand that banks will continue to lend until the last person willing to pay the current price of money"walks through the door ", yes? You understand that govt spends via it's bank marking up reserve accounts (which leads to retail banks marking up deposit accounts) then, as a matter of policy, any excess reserves are drained via issuing Gilts to Gemms which they then sell on, yes? The money only stays in bank deposit accounts unless it's spent, at which time it will attract taxation and eventually return to the issuer. Does that make sense?
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  189. Absolutely! Markets are controlled and regulated by government, "free markets" my a*se!
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  190.  @physiocrat7143  Gotta wheel out that old chestnut every now and again.
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  191.  @m0rtifiedpenguin  not necessarily, the money supply is endogenous.
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  192. If you are interested in the realities of the hyperinflation hyperventilators, the ZimWeiArg types, do a search on "Clint Ballinger hyperinflation", lots of good info on the site for those newer to MMT.
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  193.  @helenheenan3447  if you are interested in learning more about the hyperinflation hyperventilators favourites, ZimWeiArg etc clint Ballinger has written a lot of interesting analysis on "The Myth of Hyperinflation". Also, Phil Armstrong and Warren Mosler have joint authored a paper specifically on Weimar.
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  194.  @grolfe3210  there's an obvious and fundamental lack of understanding on your part. Which points do you think haven't been dealt with?
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  195.  @grolfe3210  ok, so what difference do you discern between Weimar, Zimbabwe etc and the UK? Remember, the UK govt runs it's own fiat, floating currency and finances itself via (in your words "printing vast amounts of money") ...
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  196. They have access to all the £s they will ever need , in fact, the UK can never run out of £s.
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  197. Pating interest on govt "debt" is a political choice. Refinancing govt debt via issuing HMT securities is itself a political choice.
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  198. The Bank of England Act 1946.
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  199. I suggest you read the core literature to gain a basic understanding of the subject under discussion.
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  200.  @adenwellsmith6908  ok, which part(s) of the core literature are you getting the "you cannot use printing" etc. from? Double the money supply you say, ok can you explain how that would happen and any timescale you are referring to?
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  201.  @adenwellsmith6908  I see no explanation which answers the questions I asked above.
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  202. You could always try reposting to answer the questions I asked.
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  203.  @adenwellsmith6908  "All deleted" 😂 No chance of reposting then? Please come back when you can answer the simple questions I asked. Until then I advise you to spend some time researching the subject; less chance of you having to rely on the "dog ate my homework" excuse.
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  204. @kaz4845  Good question. When govt buys something/spends, it instructs the BofE to mark up the reserve accounts at recipients retail bank, the retail bank then marks up the relevant deposit accounts. For example, if govt is buying something from me today for let's say £1,000 then HMT instructs BofE to mark up the reserve account of my bank by 1,000 (Nat West or whatever), NAT west will then mark up my deposit account by £1,000. At this point, if that's all that's happening with govt spending today, there are £1,000 more reserves in the system than yesterday. Govt policy is to drain any excess reserves in the system, in this case £1,000, by issuing securities for the excess amount. It does this to control the bank rate. It's a purely political choice.
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  205.  @dboynette  it works exactly as I described, that's how our fiat money system works. Last time I looked £1 would buy three freddo bars.
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  206.  @spulevic  is this new country using it's own currency? If so, where would it "borrow" it from?
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  207.  @peterweston1356  tax is the drain, the removal of previously issued £s. Govt buying things/spending is the injection of newly created £s.
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  208. Check out the BofE Quarterly Bulletin from Q1 2014 entitled "Money creation in the modern economy"
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  209. @metallitech  it's clear that deposits don't fund bank lending, in fact it's clear loans create deposits.
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  210.  @metallitech  the same reason they offer any other product, because they believe they can make a profit from doing so. Nothing to do with them being able to make loans.
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  211.  @metallitech  I've heard the BofE described as many things but I've never heard it described as having an "MMT bias", whatever that is. The "created deposits" may lead to outflows when they are moved to a different bank, it depends on what else is happening and how it all nets out. By "central bank money" I assume you mean reserves. Obviously, banks use reserves for settlement. Savings accounts don't create reserves, only the BofE can create/destroy reserves.
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  212.  @metallitech  Bank lending doesn't require funds, but don't take my word for it, here's what the BofE says: "The reality of how money is created today differs from the description found in some economics textbooks: . Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits.
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  213. QE is an asset swap, reserves for Gilts. It reverses the original transaction when the Gilt was issued and swapped for reserves.
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  214. Richard doesn't understand MMT and he doesn't understand the fundamental role the Job Guarantee has within it. The whole point of the JG is to drop the moronic idea of trying to run an economy on the price of money and shift it to anchoring it to the price of labour.
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  215. No need to set up an investment bank, the UK govt already has it's own bank, the BofE and the Consolidated Fund.
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  216. ​ @melch4040 the BofE is wholly owned by the UK govt, not "the city". Govt needs banking, it doesn't need a bank but chooses to use it's own.
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  217. Issuing HMT securities and paying interest on them are both purely political choices. Gilts etc. are a refinancing operation, not a funding operation. The only "borrowing" the UK govt undertakes is via it's own bank, the BofE.
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  218.  @physiocrat7143  there's a lot in there, firstly, please explain what you think the hyperinflation hyperventilator favourites ZimWie etc have to do with anything I posted m
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  219. A government with popular support is not a requirement of MMT, that's something Richard made up, it's RMMMT (Richard Murphy Version of MMT).
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  220.  @therealrobertbirchall  sure, political instability is never desirable but "popular support" and political stability have nothing whatsoever to do with core MMT, to say they do is misleading.
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  221.  @edwardmclaughlin7935  As I said previously, MMT isn't something that's "tried" or "not tried" it (the descriptive part anyway) describes how fiat floating money systems, like ours in the UK, actually work. The "problem" with the MMT label is, it's not modern (these kinds of money systems are at least 5000 years old), it's about resources/stuff not money, and it is observable fact not "theory".
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  222.  @therealrobertbirchall MMT is observable fact. Every now and again people disagree with, add to or take away from what MMT actually is and still call whatever is left MMT. That's what is happening here, he's added in the stuff about political instability etc and assorted it's intrinsic to MMT; it isn't. There's nothing wrong with debate, it should be welcomed and encouraged but dissemination of incorrect information should always be challenged.
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  223.  @therealrobertbirchall  Richard often talks about RM-MMT (Richard Murphy's version of MMT) and not actual MMT. You can generally gauge someone's understanding of MMT by how much they talk about the Job Guarantee.
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  224.  @therealrobertbirchall  I don't think I've ever heard him talk about the JG, maybe he has though; the point is, it's Core MMT, the price anchor mechanism. Those who are running the economy are quite happy with how it works for them, that's the problem.
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  225.  @therealrobertbirchall  Hmmm. Please take this in the spirit it's intended (I'm trying to help) ... You have some work to do to understand what MMT (and the MMT "lens") actually is rather than listening to what certain people on YT telling you what they think it is (and often getting it wrong). Forget ubi, it's a nonsense. As to your question on the JG, the answer is neither. A JG would act as an automatic counter cyclical stabiliser and as the base price anchor in the economy. We already have a JG of sorts, the only "job" available to it is to look for work for 30 hours each week - it's called universal credit. If you are genuinely interested in finding out more about MMT I'd be happy to point you to some helpful resources.
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  226.  @patrickokeeffe-i7i  You are right, MMT isn't a policy regime, except for Zirp and the Job Guarantee, and it doesn't do your politics for you. What's new about MMT is the use of the JG as the automatic counter cyclical stabiliser and price anchor rather than trying to manage an economy based on the ridiculous idea of searching for the "One True Rate" that makes everything alright.
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  227. I think I replied to you elsewhere but I'll do it again here. Truss was cooked by the LDI debacle. The entire episode provides a very handy narrative for the TINA types.
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  228. No need for a video, the answer is "because they are puppets of private industry".
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  229. Maybe he should have said "we will use our fiscal powers to provide, as far as possible, full employment".
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  230.  @nakodares5982  whats non specific about it?
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  231.  @nakodares5982  firstly, fiscal rules are ridiculous, the entire idea is starting from the wrong place. Secondly, the action necessary to provide full employment is to implement a Job Guarantee.
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  232. @nakodares5982  Fair point, the video is nonsensical too in its focus on "fiscal rules". Starting from the position "how many £s shall we issue into existence" is ridiculous. The Job Guarantee isn't communism, it's a superior counter cyclical auto stabiliser to the "let's try to manage inflation by changing the price of money" narrative. In effect, we already have a Job Guarantee, it's called universal credit.
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  233. Creating money from nothing is literally how fiat works.
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  234.  @richardsillett9802  Creating new £s is how govt buys things/spends every day. This is a simplified version of the process: . Parliament authorises spending . HMT instructs the govt's bank, the BofE to mark up accounts of recipients . BofE must comply so it marks up the reserve accounts of recipients retail bank . Retail banks mark up deposit accounts of recipients . BofE marks down the Consolidated Fund . new £s created every time So, govt, via parliamentary can indeed does create £s as necessary, that's how fiat works. I think RM's description of "equity" is tenuous. It's important you understand the difference between the currency issuer (HM Govt) and a currency user (everyone else). Govt debt is the difference between the £s govt has spent into the economy and the £s it's taxed out of the economy. In other words, it's the net financial assets in the private sector. If tomorrow the govt spent £1,000 and received £800 in taxes etc. then govt debt would increase by £200; there would be £200 more in net financial assets in the private sector than today. What are the limits? Good question. The UK govt faces no purely fiscal constraint, the only constraints it faces are availability of resources at a price it's willing to pay and politics.
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  235.  @richardsillett9802  there is indeed a "magic money tree", it lives in the Supply process and it's fed by the Consolidated Fund.
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  236.  @richardsillett9802  The basics are pretty simple, all govt spending is new £s. Simplified, here's the process: . Parliament authorises spending via the Supply and Appropriation Bills - normally. . HMT instructs BoE to mark up the reserve accounts of recipients retail bank . BoE must, by law, comply so it marks up the relevant reserve accounts, retail banks then mark up recipient deposit accounts . New £s every time Whatever spending is included in a supply act cannot legally be prevented.
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  237.  @patrickokeeffe-i7i  Reality is all govt spending is "borrowing", initially from it's own bank, the BofE. As you say Gilt issuance is a political choice and coupon payments are a state benefit for people who have money. Gilts are a refinancing operation, not a funding operation. However, if using the definition of "borrowing" as taking with the intention of later giving back, then Gilts are "borrowing".
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  238.  @carlosbtc999  govt spending injects, taxation drains; that's how the system works. If, when, how much, on what and who benefits from govt spending (and taxation) are political choices driven by ideology. Also, banks don't "lend out money" the loans they make create deposits, it's balance sheet expansion (as is all money creation).
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  239.  @inthegutterstaringathestars  it's not an option, it's how floating, fiat money systems work. All, that's all, govt spending is via direct money creation; new £s every time. Mazzucato has sold out, she signed the letter to the times (or whoever it was) with blanchflower and the rest of the idiots. When were keen or kelton (who was recently on Novara 🤔) on legacy media espousing the capacity of the currency issuing state?
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  240.  @inthegutterstaringathestars regarding QE, I wasn't suggesting that at all, because it's nonsensical. Govt issues Gilts by political choice, they aren't a funding operation, they are a refinancing operation. If Gilts weren't issued the excess reserves would sit in the banking system so what's the difference between reserves and Gilts? Mazzucato gets on legacy media because she's sold out. What has keen written in the ft? Where else has he appeared on legacy media?
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  241.  @inthegutterstaringathestars  QE does not and cannot "reduce govt debt". All it does is change the name tag on the Gilts involved. QE is "used to reduce interest rates"? Why bother with QE when the MPC could simply reduce the bank rate? Trying to run the economy on varying the price of money is a ridiculous notion, QE is an extension of that ridiculous notion, even the BofE explanation of it is intellectually incoherent.
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  242.  @inthegutterstaringathestars you don't seem to understand what government debt is or how it comes about so, ok,we are going to have to go back to basics here so, for now, let's ignore QE, ok? If someone asked you to describe how (in high-ish level terms) govt fiscal ops work on a daily basis and the legislation involved, what would you say?
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  243.  @inthegutterstaringathestars  talking of classic retorts ... Your "argument" isn't based on reality and your "what does the legislation have to do with it?" comment reveals your lack of understanding. What do you have to back up your "argument"? Govt is the currency issuer, individuals are currency users, there's a fundamental difference. Once again, Gilts are issued ex-post of spending and by political choice, there's no good reason to issue them. You say my argument is incorrect, ok, what do you think my argument is and where do you think it's incorrect?
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  244.  @inthegutterstaringathestars  well, you talked about QE, that's it. We can come back to the rest of your post but, for now, let's get back to basics ... You said "legislation is there to provide a framework for govt debt..." so explain what you mean by that and which legislation you are referring to.
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  245.  @inthegutterstaringathestars  ok, so no explanation of legislative architecture which covers govt spending, fair enough. So, please explain which legislation you are referring to which "cover the limits for govt securities and the levels at which those are set", which specific Acts are you referring to?
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  246.  @inthegutterstaringathestars  I do indeed understand what government debt is and how it comes about. I'm happy to talk about it with anyone who is interested in finding out about how our fiat money system works, particularly government fiscal ops. The Charter for Budget Responsibility and Finance Acts have nothing whatsoever to do with how government fiscal ops actually work or the capacity of our currency issuing govt.
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  247.  @inthegutterstaringathestars  it's not contradictory at all. The Finance Act lays out the taxation regime for the following year, it doesn't explain how our fiat money system or govt fiscal ops actually work. The obr has absolutely nothing to do with govt fiscal ops.
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  248.  @inthegutterstaringathestars  there is no contradiction whatsoever. You are confusing policy choices (Obr, QE, finance act provisions etc) with the reality of our fiat money system and currency issuing govt. You understand the difference between the reality of govt fiscal ops in our fiat, floating system and the application of policy as mentioned above, right?
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  249.  @inthegutterstaringathestars  this is painful, it's clear you don't understand how our fiat money system works. The operation of the system is in no way affected by any of the things you referred to. It operates the same way every day regardless of any of the policy choices you keep confusing with reality. We have a fiat currency (not convertible on demand to anything) which floats against other currencies. There aren't multiple floating systems, the bank rate doesn't "float", it's set by govt via the MPC. If someone asked you to explain the basics of govt fiscal ops, what would you say? Let's take the example of govt paying me for some work I've done or govt paying pensioners every day...
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  250.  @inthegutterstaringathestars  I've been consistent throughout and haven't flip flopped in any way. For the avoidance of any doubt whatsoever, it's clear: . you don't understand and cannot explain what government debt is or how it comes about . you don't understand and cannot explain, even at a simple level, how our fiat money system works . you don't understand and cannot explain (despite being asked multiple times) how govt fiscal ops work on a daily basis . you mistaken policy choices for system operations The above is a non-exhaustive list of things you don't understand. You don't understand anything about how the money system works so how can you analyse any kind of policy choice within it; you can't. Given the above and your refusal to explain, even at the simplest level, how govt pays pensions every day why on earth do you think anyone should take any of your opinions on the matter under discussion seriously? It beggars belief.
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  251.  @inthegutterstaringathestars  ok then, here's your chance to show you understand and can explain any of this ... Explain the legislative architecture (the three/four Acts of Parliament) and processes which constitute the system of govt spending (hint: it's nothing to do with any of the things you have referred to previously) and how they fit together. Over to you...
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  252.  @inthegutterstaringathestars  you seem confused about what "permission" is. However, if you want your opinions on a subject to be taken seriously by anyone but yourself then you are going to have to prove you understand and can explain the system under discussion. You never asked me to explain anything at all, you were too busy putting forward your unbacked and completely made up opinions and confused them with an explanation of the realities of our fiat money system and govt fiscal ops. If you don't take the opportunity to demonstrate you understand the subject and can explain it that by doing exactly then means you obviously don't understand and cannot explain. Case closed.
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  253.  @inthegutterstaringathestars  well, you can settle the matter of whether you understand and can explain how govt fiscal ops both at the higher level and on a daily basis (paying pensioners for example) is by explaining how the system works, including the legislative architecture, at those levels. If you don't take the opportunity to demonstrate your understanding then why on earth would anyone take any of your unbacked opinions on the subject seriously. So either ... Over to you to explain or ... It's Case Closed. Narrator: everyone knew it was Case Closed.
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  254.  @inthegutterstaringathestars  any time you can muster the mental and physical resources to be able to explain the simple things you say you understand, please come back and do so. Until then, keep raging with yourself. Bye 👋
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  255. It's naive in the extreme to believe these neoliberal ghouls don't know what they are doing.
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  256.  @WarrenPeaceOG  banks provide liquidity.
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  257.  @anglo-irishbolshevik3425  the primary constraints are inflation (resources being available for govt to use at a price it's willing to pay) and politics.
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  258. MMT reveals that the UK govt can never run out of £s, it's the sole issuer of the currency. Every time govt buys something it issues new £s into existence. Every time it taxes it takes £s out of existence. Why should the above facts have any bearing on currency markets?
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  259.  @baronvontrap3325  these people ☝️ have zero idea how fiat money systems work.
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  260. It's not a stupid question. Firtly, Gilt holders are not "investors" they are simply people who choose to hold govt securities over any other asset (cash, shares etc.) Gilt holders don't set the rates, the DMO does, GEMMS have to buy bonds at issue otherwise they lose their licence. There is a registry of holders it's called CREST.
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  261.  @SlowCarToChina  try to think of things in terms of resources, mainly people. For govt to buy the things it needs, those things need to be available for govt to buy if it wants to avoid inflationary pressure. E.g. if govt wants to create a national council house building program (it doesn't), or employ more teachers, nurses etc given the standard options it always has, how does it go about it?
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  262. Point of order: MMT isn't "applied" or "not applied", it describes how fiat money systems work now, today. The UK govt can never run out of £s, the rest is politics.
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  263.  @NikkisNosh  Yes, a core doctrine of neoliberalism is to prevent the nexus of the currency issuing state and the working class, hence the "no such thing as public money, only taxpayers money" and "we can't afford it" nonsense. As Keynes said, "whatever we can do, we can afford". The UK govt can never run out of £s, it's the self financing currency issuer. It issues them into existence every time it spends. If it issues them, what it issues them for and who benefits are all political choices driven by ideology. The state of the country; NHS, infrastructure, education etc is a direct result of the application of the above ideology.
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  264. There's nothing controversial about the descriptive portion of MMT, it describes how our fiat money system operates now, today.
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  265.  @mikebrough3434  you only have to read a paragraph or two of any of those results to realise they are, at best, strawman arguments and at worst, economically illiterate. What implications do you think the implications are and why do you think they are controversial?
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  266. It does work, in fact it works perfectly but only for those it's intended to work for.
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  267.  @kevinsyd2012  I'd go along with most of that, couple of points though: . "printing money" throws up al the negative framing that gets the hyperinflation hyperventilators all excited . QE isn't "money printing", it's an asset swap, reserves for Gilts. It simply reverses the original transaction which swapped Gilts for reserves . It's a finer point but, Taxation is used to depress demand so the resources govts wants to use are freed up. . Govt deficits aren't necessarily good for the economy; as ever the important questions are who has the and why?
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  268.  @azar1354  the debt you refer to is simply the difference between the number £s the government has injected into the economy buying things/spending and the number of £s it's drained from the economy via taxation; in other words, it's the number of £s in the economy.
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  269. LDI's happened to Liz Truss. To be clear, all government spending is borrowed from it's own bank, the BofE. The process, simplified, works like this: . Parliament authorises spending . HMT instructs the BofE to mark up accounts of recipients . Bof E must, by law, comply so it marks up the reserve accounts of recipients retail banks (retail banks then mark up recipient deposit accounts) and marks down the Consolidated Fund . New £s created every time.
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  270. All of that is incorrect. The bond market has nothing to do with fiscal policy in the UK. By the time HMT securities are issued, the spending has already happened. Gemms are obliged, as part of their licence, to make market in Gilts under all conditions.
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  271.  @coAdjointTom  I'm not sure what you are asking there but, for context, there are a few things to consider about the Truss episode as it provides some valuable insights. . The £ was "plummeting" since Feb 2022 but, oddly, we didn't get the 24/7 breathless coverage we got with the Truss budget, did we. . Truss was cooked, in large part, by the LDI debacle. . She should have sacked Bailey but, of course, she couldn't.
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  272. It's the difference between the number of £s government has injected into the economy via buying things/spending and the number of £s it's drained from the economy via taxation. In other words, it's the amount of £s currently in the economy.
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  273.  @LeslieWatson-t5f  Unemployment is largely a story of government taxing too much for the size of government. There's no real reason we can't have full employment, all that prevents it is political ideology. As for "growth", it depends what "growth" you want and who benefits from it.
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  274. Only if you don't understand what it is.
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  275. QE is an asset swap; Gilts for reserves. It's a reversal of the original transaction which swapped reserves for Gilts.
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  276.  @adenwellsmith6908  Remember, the UK govt can never run out of £s.
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  277. Selling bonds doesn't "raise money". Bonds are sold, by political choice, to drain any excess reserves govt injected earlier.
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  278. Instructing, rather than asking. I agree though, the language used to frame the subject isn't helpful at all. Technically, govt borrows from it's own bank but the negative connotations of the term don't apply to the currency issuer, only the currency users.
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  279.  @garethmills105  Except of course for ZIRP and JG.
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  280.  @garethmills105  which proponents are you referring to? As I said, the JG is core to the framework; without it, it's not MMT. Of course you can disagree, we should have reasonable, informed debate. However, you cannot simply say JG isn't required and still call it MMT. If you do the above you are doing what Richard does; he gives his own version, which is absolutely fine but he shouldn't pitch it as MMT, he should pitch it as RM-MMT (Richard Murphy's version of MMT). There's nothing stopping you doing the same but for clarity you should call it GM-MMT. Btw, have you read the core literature?
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  281.  @garethmills105  Sorry, to be clear, we only disagree on what you should call your opinions; you should call them GM-MMT as they are what you believe MMT to be, not what it actually is. Which parts of MMT do you believe are theoretical?
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  282. It seems you don't understand how the state pension works; it's a case of how much of current production those under a certain age are prepared to give up to those over a certain age.
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  283.  @scottyfive4319  I've no idea what you are trying to say. The reality of the state pension is exactly as I said above.
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  284.  @scottyfive4319  it's not doomed to failure, in fact it's the only way the state pension can work, as a direct transfer from workers to those who are retired. It's always a question of stuff and how much of it those below a certain age are prepared to give up to those over a certain age. It's never anything to do with money and "pots", there's no state pension "pot".
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  285.  @theolddog5129  Tax revenue (from the old Latin/French 'returned') doesn't allow additional people to be employed. Taxation is the drain (the return) of previously issued £s.
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  286.  @theolddog5129  You seem to be labouring under the misapprehension that "taxpayers" somehow create £s which then fund the govt; this is not the reality of the situation, govt funds us, we don't fund govt. Taxes drain previously issued £s, they create the space for govt to spend into.
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  287. @Darren-g6f  what do you mean, growth in what?
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  288. @Darren-g6f  oh right, I understand you. Yeah, most people couldn't give a fig about GDP, could they? It's a meaningless metric to most people.
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  289. The UK government owns the BofE.
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  290. What we refer to as "government debt" is simply the difference between all the £s govt has issued into the economy by buying things and all the £s govt has taken out of the economy via taxation.
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  291.  @danielpye7738  Because it's not about money, it's about stuff people mostly.
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  292.  @rabmcnair4488  Hello rab, try to think of things in a different way; the UK govt neither has nor doesn't have £s, it issues them (brand new £s) into existence via it's own Bank whenever it wants to buy something from the private sector (spending). It can never run out of £s. So, all govt spending is via the creation of new £s, these £s circulate in the economy and they all (except those which are saved) return to the issuer via taxation. QE is an asset swap, Gilts for reserves. IT reverses the original transaction which swapped reserves for Gilts. The money did enter the economy but it primarily went into inflating asset prices.
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  293.  @physiocrat7143  you understand "government debt" is the difference between the £s govt has injected into the economy and the £s it has drained out of the economy (i.e. the £s in the economy, the net financial assets in the private sector) and the only borrowing govt does is via it's own bank, the BofE, yes?
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  294.  @skyblazeeterno  I've no idea why they settle on 25%. However, if you think of the economy in terms of available resources, what could be achieved for the public good with those resources and what those resources are actually being used for you can get an idea of what is being "lost".
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  295.  @skyblazeeterno  You are asking me why the other person said 25% of the economy is "lost"?
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  296. The problem is, prioritising people's needs is, in itself, an ideology.
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  297. ​ @skyblazeeterno £s can never "leave the country", they will always remain in the sterling area. The name tags on the £s may change but the £s can never leave.
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  298. Interest payments on govt debt are a political choice. GEMMS are required to buy all bonds issued. Venezuela <> UK
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  299. What power do you think the IMF has over the UK parliament?
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  300. Please explain how "borrowing" by the currency issuer from it's own bank is problematic in any way.
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  301. Nonsense. We paid for it by changing the variance allowed in the Contingencies Fund Act. Keep up!
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  302. ​ @CuriousCrow-mp4cx MMT isn't something that's practiced or not practiced, it's a description of how fiat money systems work, particularly govt fiscal ops. Please read the core literature (at the very least) before commenting.
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  303. We don't have to. Bonds are issued ex-post of spending and by political choice. Bonds aren't a funding operation, they are a refinancing operation.
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  304. ​ @adenwellsmith6908  The DMO refinances any govt debt and converts it into a tradeable commodity.
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  305. The UK govt can always meet any bill denominated in £s.
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  306.  @mceajc  We have a currency issuing govt with it's own fiat, floating currency; that means it never faces any purely fiscal constraint, the constraints it faces are availability of resources at a price it's willing to pay and politics. Future pensions aren't difficult to fund, they are funded in the same way as all other govt spending; vis parliamentary authority and HMT instructing the BofE to mark up accounts of recipients. Given the above and the fact that the state pension is a question of how much of current production those under pension age are prepared to give up to those over the pension age (not very much in the UK) how do you see "higher inflation, currency devaluation" in that context?
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  307. @Betweoxwitegan  Take a step back my friend. MMT is a framework for understanding and explaining the capacity of a currency issuing govt with it's own fiat, floating currency. Part of it describes how our fiat money systems have worked since 1971. It's not a policy regime, but it recommends a job guarantee.
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  308. @Betweoxwitegan it's a framework for understanding and explaining the capacity of the currency issuing govt with it's own fiat floating currency. It's only policy recommendation is the JG. "Ability to change economic policy... " etc is policy choice, not MMT
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  309. Not really. Try to think of the "national debt" as the difference between the £s the govt has spent into the economy and the £s it's taken out of the economy via taxes; it's the total £s left in the economy. Banks don't lend out savings. Bank loans create deposits via the act of making loans.
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  310. You could but why would anyone accept your currency and, of course, how would you pay your tax?
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  311. ​ @physiocrat7143 taxpayers can't create £s, only government can.
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  312. The Job Guarantee is fundamental to MMT. If you say it isn't then I'm afraid you simply don't understand what MMT is. That being the case, what you are putting forward here is RMMT - Richard Murphy's M
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  313.  @garethmills105  The statement: "You can tell how much someone understands about MMT by how often they talk about the Job Guarantee (buffer stock employment framework, "superior to using unemployment as a disciplinary force against inflation") and their understanding of it's centrality to the entire framework" ... is a truism. It seems you haven't read any of the core literature or, if you have, you haven't understood it. You refer to MMT as a "theory"; it's no such thing, the descriptive portion is observable fact. Often and mistakenly, MMT is separated into two parts (and the "lens"); the descriptive part (how govt fiscal ops work in fiat, floating currency regimes) & what some mistakenly call the "prescriptive" part (two linked policies, the JG and ZIRP). The descriptive part is correct, the prescriptive part fixes the macro problems. Please, read the core literature. Once you have, you can move on to Bill Mitchell's 3 part series "Exploring the Essence of MMT", the second part of which will help to educate you on the centrality of the JG to MMT.
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  314.  @garethmills105  It's absolutely correct. The statement "You tell how much someone understands MMT by how much they talk about the JG (buffer stock employment framework)and it's centrality to the framework." is a truism. Often, and mistakenly (I suppose for simplicity), MMT is separated into two parts (without mentioning the "lens"); the descriptive part and the prescriptive part. The descriptive part is not theoretical, it's observable fact so why are you referring to "the theory"? The descriptive part explains how govt fiscal ops work in a fiat, floating currency regime; the prescriptive part explains the two mandatory policies, the JG and ZIRP. The prescriptive part is absolutely core to the entire framework.
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  315.  @garethmills105  you are doing exactly as Richard does; you are telling everyone what you think MMT is, not what it actually is. See the truism I posted earlier. It's simple, if you don't understand the centrality of the JG to MMT then you simply don't understand MMT 🤷
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  316. The last DMO auction was oversubscribed by a factor of 2.75.
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  317. The private sector does want them. The last Gilts auction was oversubscribed by a factor of 2.75.
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  318. The so-called "national debt" is simply the difference between the £s the government has spent and the £s it's taxed back. That's it! The interest payments don't and can't ever leave the Sterling Area.
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  319.  @theolddog5129  You are welcome. What do you remain unconvinced about? The digital tokens being given to Chinese companies are the same ones we have, i.e. £s. Greece's problems were wholly caused by the EU and the ECB, Varoufakis book is a good explanation of what happened; Greece should have left the EU, but .... The UK govt doesn't "borrow" from it's own population, it's the sole issuer of the currency (no-one and nothing else is legally allowed to issue the currency). Govt debt held by foreign entities is no more problematic than the £s in your bank account.
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  320.  @paulsoutham2454  Exactly. Tesco don't go to the "Tesco Points vigilantes" and ask if they can borrow some Tesco points when they want to issue more Tesco points, do they.
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  321. Put simply, they are nonsensical ideas which politicians can then use as excuses for why they didn't do anything to benefit the lives of the electorate.
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  322.  @foxmoongaze  you think politicians lying about what is and isn't possible is "playing with word's"? Understanding what MMT actually is leads one to understand the important things are resources and how govt uses them, not £s. In what way do you think confidence in GBP would "plummet", what's the mechanism?
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  323. @foxmoongaze  if govt doesn't continue to create £s and continues to tax at the same rate what do you think happens to the private sector? Please explain what this confidence thing is.
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  324. @foxmoongaze  well, it depends, doesn't it. Why do you suppose people buy Gilts and not stocks and other assets? What's the mechanism for "losing confidence" in a currency?
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  325.  @scroopynooperz9051  Well, QE is an asset swap, that's it.
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  326. It's a myth. The BofE isn't independent in any way.
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  327. Until he later changed his mind.
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  328.  @shauneden4229  which Act is it?
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  329. @shauneden4229  the provisions of the Act look pretty clear cut in terms of ownership, what makes you say it's still a private bank?
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  330. @kiuk_kiks  He has his own version of MMT which isn't MMT. He even suggests the founders of MMT are wrong about MMT!
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  331. A"nything we can actually do, we can afford".
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  332. @alexjeffrey3981 oh, right. The reality is the UK govt is the sole issuer of it's own fiat, floating currency; it can never run out of £s. The TINA, neoliberal narratives and supporters expend every effort to prevent the working class from understanding the above. Recent examples of the capacity of the currency issuing state being revealed are the GFC and COVID but WWI was probably the first.
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  333. ​ @alexjeffrey3981  Oh, right. (my last comment seems to have been deleted, let's see if this gets through) Well, the UK government is the sole issuer (via it's own bank) of it's own fiat, floating currency - the £. It can never run out of £s, it issues them into existence every time it buys something/spends. The cultural hegemony expends every effort to make sure the above information is, at least, obscured and supports and promotes the Thatcherite "there's no such thing as public money, there's only taxpayers money" which is clearly nonsense. Every now and again, normally during a major event like, say, the GFC, COVID, WWI, the state reveals it's currency issuing capacity. Austerity often follows. I hope that makes sense.
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  334.  @alexjeffrey3981  I think a short form comment of mine got through ☝️
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  335.  @gio-oz8gf  it's not. MMT is a description of how fiat money systems work along with two policy proposals. Understanding how fiat money systems work, especially govt fiscal ops, allows one to view policy choices through what's called the MMT "lens".
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  336. @martinaston1715  Taxpayers don't fund government, government funds taxpayers. We have a currency issuing govt with it's own fiat floating currency; that means it's self financing.
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  337.  @JohnPark-xf2gq  the reality is the UK neither has nor doesn't have £s, it issues them into existence every time it needs them. you will have to explain how our currency issuing govt (the only entity legally allowed to issue the currency) will have more £s to spend by taxing the rich...
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  338. She is doing her job properly. Her job is to make sure her corporate masters don't suffer. She has all the power she needs to direct the BofE to do whatever she wants them to do but she wants them to continue using interest rates to try to manage the economy and give state benefits to rich people.
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  339. If you are truly concerned about the "national debt" then you can do your bit to bring it down, send all your net financial assets to HMT.
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  340.  @jeff__w  Sorry, but point 1) above is incorrect. All Eurozone countries have their own Central Bank and can indeed issue Euros.
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  341.  @jeff__w  Sure, probably the best source on the Euro and Eurozone is a man called Dirk Ehnts. He's written extensively on the subjects.
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  342.  @malcolmbarnett8470  taxation performs multiple roles but the primary one is to free up resources for govt to use i.e. drain enough demand in the private sector to free up the resources govt wants to use. For
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  343.  @wsollers1  what, in your opinion, is the split between govt £s and bank credit £s in terms of % and, upon what do you base your assertion?
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  344.  @garethmills105  can you explain why the descriptive part of MMT doesn't describe the reality of govt fiscal ops in a fiat, floating currency regime?
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  345. @sailawayteam  maybe we are talking across each other. I'll try to elaborate. Govt spending and taxation are separate functions and they are not operationally dependent. All govt spending, except that which is saved (somewhere between 10 & 15%) is returned to govt via taxation.
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  346. @garethhumphries4039  Well, the act explicitly states it's not independent in any way. Sorry but MMT isn't just descriptive at all. It is indeed prescriptive in terms of the JG and Zirp or close to. If you don't understand how and why the JG is fundamental to MMT then you don't really understand MMT.
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  347. @sailawayteam  from an MMT perspective all govt spending is just spending, it wouldn't be split between "investment" and other spending. You aren't considering the private sectors desire to save (around 10% or so) so how would you accommodate that?
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  348. @sailawayteam  yes, sort of. An MMT perspective leads one to understand that starting from a number (the budget) is the wrong place to start. And yes, people like to save so, if it's not being spent then it won't attract taxation and return to the issuer. It's the equivalent of leaving money in a drawer or under the bed.
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  349.  @garethhumphries4039  exactly what are neo Keynesian ideas? Again, MMT doesn't describe how our economy works, see my other post regarding this. Have you actually read the core literature?
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  350. @sailawayteam  The fundamentals are correct. That is: Whenever govt buys something/spends, it instructs it's own bank to mark up the reserve accounts at recipients retail banks. The BofE must, by law, comply so it marks up the relevant reserve accounts. The retail banks then mark up the recipients deposit accounts. New £s are created every time.
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  351. @CuriousCrow-mp4cx  well, he's laying out the fundamentals of govt fiscal ops in the UK.
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  352. How do you think government "creates increased money"?
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  353.  @LurchLures  The relation between inflation and money growth for low-inflation countries (on average less than 10% per year over 30 years) is weak, if not absent” (De Grauwe and Polan 2005: 256).
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  354.  @LurchLures  You are welcome. I try to keep things civil. If you read the research you will understand the 10% point. You are correct about CB's, the BofE is wholly owned by the UK govt; the Bank of England Act 1998 lays out which is master and which servant. Our government is self funding, it issues new £s into existence (it's the only entity legally allowed to do so), via it's own bank, every time it buys something/spends. Issuing HMT securities is a purely political choice which happens ex-post of spending. These securities convert a static, non tradable entity into a tradeable commodity at a higher rate. These securities are not a funding operation, they are a refinancing operation. “The use of quantity of money as a target has not been a success,” concedes the grand old man of conservative economics. “I’m not sure I would as of today push it as hard as I once did. Simon London, “Lunch with the FT – Milton Friedman,” Financial Times (7 June 2003)
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  355.  @pauldandurandboots  The govt should never compete with the private sector for the resources it wants to use.
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  356. The JG is not a policy choice, it's fundamental to MMT.
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  357. Anyone can buy Gilts in the secondary market. Take a step back. Once you understand what govt debt is and what Gilts are, things become clearer.
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  358.  @paulsoutham2454  Yes, that's a good analogy. Similar to the question: Does Tesco have to borrow Clubcard Points from the Clubcard Points Vigilantes before it can issue more Clubcard Points.
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  359. ​ @billB101 MMT explains how our fiat money system has worked since 1971.
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  360. ​ @branduusituuli you are forgetting the external sector and the private sectors desire to save.
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  361.  @branduusituuli  Then how does that fit into your nonsensical statement: "So, if a government spends (prints) more money that it can recover from a nations income - irrespective of the source of that income - then it is spending (printing) too much money."?
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  362.  @branduusituuli  Ok. Forgetting, for now, the nonsensical "irrespective of the source of that income" ... Government injects new £s into the economy every time it buys something/spends. It drains £s from the economy every time it taxes/fines etc. It doesn't "recover" £s from a "nations income", it drains the previously issued £s via taxation/fines. All £s injected by government, except those which are saved, will be returned to the issuer via taxation.
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  363. They do, they don't want the public to know.
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  364. Reality is taxes don't fund anything at all at national level, they create the space for government to spend into.
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  365.  @theotherside8258  State pension is a matter of how much of current production those under pensionable age are prepared to give up to those at or above pensionable age. It's a transfer from those currently working to those over the set age.
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  366. MMT isn't applied or not applied. It is how things are, it's how our fiat money system and govt fiscal ops work now, today.
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  367. The private sector cannot create the currency, it can only create credit denominated in £s which nets to zero. The only way net financial assets are added to the private sector is via govt spending. The only motivation for the private sector to do anything is profit so, if there isn't a profit to be had in looking after these aged etc. (why should there be) then who is going to do it?
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