I posted this on Twitter:
Net of QE the gov’t might borrow £70bn from those who want to save with it this year. Every year £70bn also goes into ISAs. We don’t think that threatens the viability of banks or building societies so why is it claimed that people saving with the gov’t threaten its finances?
— Richard Murphy (@RichardJMurphy) July 22, 2020
I make the point for good reason, of course.
ISA savings do not threaten the viability of banks and building societies.
Nor do people saving with the government by buying its bonds threaten the government's financial viability.
But we call people saving with the government ‘borrowing', and as a result the government is now planning to keep millions of people unemployed in what will be a forlorn attempt to repay the deposits of those people who would really much rather leave their money in its safe custody.
So what is this bizarre logic?
And why do we have to suffer it?
This morning's video addresses some o these issues.
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:
I still believe that this is being done for one reason and one reason only and that is to get people to believe that the Government can offer no way out of such situations – that is to say that the State is not here to help you.
The best way to destroy something is to make it ineffective. That way you pave the way to create consent to ditch it or change it. Thus cutting it off as a recourse for ever.
This is the British way – starve something of cash, put stupidly repressive rules around it and watch people begin to turn away and care less about it.
Whether it is for closing railway lines or reducing the benefit bill – it’s the same cold logic.
Maintenance of power rules. Say that you should do things that are secretly divisive.
Not creating money in the hands of those who have none now and are needy, is a form
top down social control.
They are become prey to quackquid at 1600%. Do quackquid get the cash from the banking
system for free.
All with full approval of the people.
Yeah!
HOLYKOW has a chitty that says he can do anything he likes. Sod you little people.
Does he though. All proroguing (power projecting that is) can be fixed with a strategicly
placed fan.
http://www.vote.uk
All people, All topics.
Referendise everything.
It would help if you were less cryptic
If you’re a Libertarian this basically means you struggle mightily to recognise anything that’s cooperative especially money!
As I pointed out in a previous post Keynes seemed to recognise this cooperative quality of money by stating in his 1936 book “The General Theory…” Chapter 21, Part I, that money was a link between the present and the future.
Translated into the situation we find ourselves in today faced with an invisible enemy creating economic disfunction many are forced to seek extreme liquidity not spending as much and electronic digits on their bank’s computer increasing or near liquidity treasury bonds even the ancient non-government liquidity of gold.
So there in operation is the cooperative nature of money. In times of crisis it offers the ability to disinvest from an economy.
The problem is we live in a monetary economy and most are reliant on income streams from investment and pure liquidity can only ever be a temporary phenomenon.
As we emerge from uncertainty it makes little sense for libertarians to think that a government doesn’t have money creation powers or can use them to boost the process of restoring income streams.
It makes even less sense in times of uncertainty to want to tax income streams to balance the government’s books even if that was possible with today’s automatic stabilisers.
Of course, with this current UK government it’s hard to know whether it recognises this or clings to Thatcherite Libertarianism in regard to money.
We’ve seen from the period May was prime-minister secretive guarantees with the car industry not to let Brexit damage their bottom line.
Now it may well be this Johnson government is gearing up to a No-Deal Brexit in which UK businesses whose bottom line is hit by large increases in tariffs will get government compensation.
For how long is indecipherable of course. Given that strategy may well be one of split mind because of the clinging on to Thatcherite house-keeping nonsense (that government shouldn’t use money in a cooperative sense of helping optimise an economy because it has to balance its books at all times) and the Little People, as Leona Helmsley famously said, may well find themselves paying increased taxes to pay for a No-Deal Brexit!
Of course, as MMT’ers know, that will retard the UK economy from returning to growth from the Coronavirus Recession just as the Conservatives with their monetary system ignorance retarded the recovery from the Great Financial Recession of 2008.
The answer statement that the govenment is like a household, is that the govenment can leagally print money.
So it is a household which can legally print money. Why borrow when you can print money?
I’ve just done a video explanation of this
You’re ignoring the fact that debt has a great many purposes
Because you can print that money and make the debt go away – at anytime, that is what the Government ‘household’ as call it can do.
All the MMT process does is recognise that in any economy there has to be mix of saving and spending.
In such a situation as paying off the debt by printing money, I imagine that tax would have to play a part too, as the counter party’s role was no longer that of a saver.
Saving and taxation both take money out of an economy which can help to control inflation when using MMT.
I admit I am not sure I follow this
Also a government is not a house hold, though it does have many hourse eeeh.
Pardon?