The cost of government borrowing is falling....and that's good news. The debt obsessives have less to obsess about when the amount of interest the UK is going to pay is falling, and likely to remain low. This video explains the issues:
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Nice one Richard……this looks like the first in the growing collection to have incorporated an embedded link….to your earlier one about QE. Will you add links retrospectively to the others already on the channel?
In anticipation of a question that might come up at a forthcoming discussion group and I organising at present, could you add to the queue something about how the government licences banks. If only governments can issue money how do they control the issue of credit by banks? Thanks
We still cannot do that – you have to wait until YouTiube let you and the channel has not reached that stage as yet
On the basis of the following two articles it seems reasonable to write to your MP attaching these articles and asking them you are worried about further austerity as an attempt to claw back coronavirus stimulus money and your belief that they think like Margaret Thatcher and believe government has no money of its own but can’t point to any rational explanation how the country does create its currency or medium of exchange:-
http://mikenormaneconomics.blogspot.com/2011/10/rogue-economist-net-financial-assets.html
http://rogueeconomistrants.blogspot.com/2011/10/what-is-net-financial-asset.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+RogueEconomistRants+%28Rogue+Economist+Rants%29
Your letter should state they may not believe in MMT but you’d like them to point to how the UK creates its medium of exchange which will justify automatically attempting to balance the governments books irrespective of a high unemployment rate and low income levels for many.
The point of the letter is of course that too many voters in this country are ill-informed and too easily taken in by politicians’ snake oil and the only way to stop politicians using this particular “The government has no money of its own” snake oil (or at least sufficient of them) is to ask them to justify why they’re using this particular snake oil.
I fear there is not a hope that they would follow the arguments
Double-barrelled appeal. If not follow the arguments come up with an explanation of their own or point to one concerning how the UK monetary system works. If it’s considered impossible they’ll be able to do this then we may as well consider Parliament to be the biggest Special Needs Remedial Class in the country!
Helen,
Given that we have been running a deficit for 10+ years, what ‘further austerity’ are you referring to?
We have run a deficit for 324 years
That has not prevented austerity
I have a very strong feeling you are here to troll…and trolls do not last long
Silent but Violent (Really! Are you a Ninja Warrior?) The cause of the austerity worry is stated in my first sentence!
Interestingly now that it’s presidential election year the Republican Party in the United States doesn’t appear to be too concerned about “the government has no money” argument as it moves to signing off on the next big tranche of stimulus money:-
https://thehill.com/homenews/senate/509108-white-house-senate-gop-race-to-finalize-coronavirus-package-ahead-of-monday
So much for the Nobel Prize winner and author of America’s best selling economic text book Paul Samuelson’s advice:-
“I think there is an element of truth in the view that the superstition that the budget must be balanced at all times [is necessary]. Once it is debunked [that] takes away one of the bulwarks that every society must have against expenditure out of control. There must be discipline in the allocation of resources or you will have anarchistic chaos and inefficiency. And one of the functions of old fashioned religion was to scare people by sometimes what might be regarded as myths into behaving in a way that the long-run civilized life requires. We have taken away a belief in the intrinsic necessity of balancing the budget if not in every year, [then] in every short period of time. If Prime Minister Gladstone came back to life he would say “uh, oh what you have done” and James Buchanan argues in those terms. I have to say that I see merit in that view.”
http://neweconomicperspectives.org/2010/04/paul-samuelson-on-deficit-myths.html
I wonder what Samuelson got right?
I’m not sure what
Richard:
Austerity is defined as:
“measures to significantly curtail government spending in an effort to control public-sector debt, particularly when a nation is in jeopardy of defaulting on its bonds”
If government spending has increased each and every year, then how does that meet the definition of ‘austerity’?
What definition are you working to?
That is your definition
It is not the one any outside the far right think tanks uses
You show your own crassness by claiming not to know
Are you really so indifferent to the human condition that you can ignore the misery created – most especially for the sick and those with disabilities – over the last decade?
Or are you just callous?
It’s not my definition at all. It’s the first entry on an internet search.
What definition do you prefer? Is this a universally accepted definition, or just one you’ve made up to suit your purpose?
Answer my questions