Someone just asked on Twitter if they could do the debt cancellation trick that QE represents.
The answer is no, because the trick depends on the ability of the Bank of England tio print money. But people can't do that.
The government can and for one good reason. It demands that we pay our tax using the pounds that it prints and that means we have to use them in the course of trade. Without tax we could use any money we liked. With tax it only makes sense to use the currency we have to pay our tax bills with because that's the only 'legal tender' we can offer to settle our debt to the government.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Richard
Sounds like you subscribe to Modern Monetary Theory economics – ie it is the requirement by a government of payments of tax in the national currency that is the driver of demand for that currency and in effect ensures that the currency is regarded as valuable and legitimate? That in MMT is the fundamental importance of tax and not, as under conventional thinking, that government is funded by payments of taxes?
I’ve never seen so much common sense on a single blog.
Richard, I know we’ve discussed this before.
Ed note:
But since I also note that you are maintaining your snide commentary on my work on other websites your comments automatically fail the comments policy here and as such the rest of this comment has been deleted
Unless debate takes place, despite diferences, on the basis of mutual respect it is meaningless
You have shown continually that you are not willing to work on that basis and as such I am not willing to entertain your commentary here