I wrote about Stephen King's article on MMT in the FT this morning.
Soon after posting it I sent a link to FT Alphaville. And this is the consequence:
As they note, having highlighting King's article:
To absolutely no-one's surprise, the great and the good of MMT have kicked off about the article on Twitter. Fellow financial blogger and tax injustice crusader Richard Murphy has been the first to respond in blog form, so here's part of his take:
After which big chunks of my blog post appear.
And as they conclude:
FT Alphaville has to say that we find Murphy's arguments far more convincing.
But we'll leave you to bicker about that in the comments.
Feel free!
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Good.
You can tell a great many people that the sky didn’t fall in when the government arranged to directly create money from thin air for the World War One effort and they simply refuse to incorporate this into their thinking. This is the behaviour of zombies!
https://bankunderground.co.uk/2017/08/08/your-country-needs-funds-the-extraordinary-story-of-britains-early-efforts-to-finance-the-first-world-war/
Thanks
As expected a flurry of BTL comment…….
But this smells like some sort of victory. Congratulations.
Thanks
Golden rule of having anything in a national news site is never read BTL
Paywall! Grrrr.
I gave you most if it…
Check – but was wanting to follow the BTLs…..
Haha, good stuff Richard. Your blog post on this has got a lot of attention by the looks of it! Great to see it all kicking off and more and more people having a serious debate about it – hard work for you to get people to a level of comprehension they need to talk sense on the matter, so it’s really good to see your responses getting wider publicity as the counter argument.
Progress! 🙂
Thanks
Well done.
Stephen King needs to get back to writing horror in my opinion.
Signs of progress with people at least acknowledging MMT as a valid analysis. Great that they recognised your contributions Richard.
Keep chipping away…
I will…
Thanks Robin
IFS Paul Johnson/David Miles quite detailed discussion of why this is not ‘free money’ .
https://www.ifs.org.uk/podcast/whats-happening-with-government-debt
Dont quite understand his suggestion that the new Government money is ulitmately offset against Bank deposits with BoE. He does seem to accept that because Japan’s govt debt is held by mainly Japanes entities – many ‘close to the state’…that is why Japan has managed to maintain very high ‘debt’ over decades… but dont think he was asked whether this could be the UK in future.
It seems the whole argument – is that all this is really only possible because interest rates are low or negative, and that the markets are convinced for now that what the government is spending money on has a ‘high return’.
The argument is that quantitative easing is reflected for national accounting purposes in an increase in the rental bank reserve account balances maintained by UK banks and building societies – which are roughly (but not precisely) equivalent in value to QE funds generated, although BoE and ONBS theory can’t explain why they are not more than they actually are, since they think other sums should also be reflected in them.
The immediate result is that these institutions appear to have much more on their balance sheets than they did a decade ago. They look more solvent. So they can keep paying bonuses! And despite this, they have continued to lend without a change in their behaviour – mainly for property and other speculative activity, which is why bankers no end.