I quoted this Guardian article on Twitter yesterday and I do so unashamedly again this morning here:
It's worth noting what came next as well:
I very rarely quote at such length, and do so on this occasion reluctantly. I do, however, think it appropriate to do so precisely because of the extraordinary content of this article, which has to have been produced with the consent of HM Treasury.
Note the language used and that it is said that Sunak 'had not opposed booster measures' not that this would have a cost on other services. The choice of the language that 'doses do not grow on trees' is undoubtedly deliberate. There is in here a very clear message that there is no magic money tree.
Except, of course, there is. Sunak's attempt to suggest that there is a shortage of money, and that we have to live within our means is, as we all now know, completely ridiculous. Over £450 billion of quantitative easing was used to fund all the deficit spending that has arisen since the coronavirus crisis began as the New Economics Foundation has shown:
Every single pound that is required to pay for booster jabs can be created by the Bank of England, costlessly, in that case.
But, just in case there is any doubt as to the availability of funding to pay for these boosters note this chart of tax revenues produced by the office for budget responsibility in October 2021 as part of its budget reporting:
Capital gains tax is forecast to raise £9.2 billion in revenue this year. But, as I noted yesterday, most capital gains tax is charged at rates that are near enough half those charged on income. If only those rates were equalised then it is likely that a significant part of those capital gains would continue to be made, but that the tax revenue would increase significantly. For convenience, and I happen to think that this is entirely appropriate, let us presume that the yield doubles. The booster vaccine doses will cost nothing like £9 billion and yet that sum is readily available to have Rishi Sunak.
In that case, and taking these two truths into account, let's consider what the messaging that Sunak is delivering is meant to suggest.
Firstly, he's arguing that cash is a scarce resource for government. He knows that is not true. He is, as a result, blatantly lying.
Second, in that case, we need to ask why he is lying and the reason is obvious. This falsehood is presented as an argument to support austerity. This is the very clear subtext of the narrative that was presented by the Treasury spokesperson.
Third, this austerity narrative is being presented even though it is glaringly obvious that the gross injustice is in the society that have been created by coronavirus, as demonstrated my recent data that I have noted from the New Economics Foundation, are not being addressed by tax changes which I have noted would be easy to deliver.
In other words, as usual, Sunak is using every opportunity to pursue class warfare. Even Covid is now within his reach as a mechanism to impose austerity on those who need never suffer its consequences. The politest term for this is callousness. The alternative is psychopathy when it is known what despair austerity delivers, to which Sunak appears utterly indifferent by allowing comments such as these to be made.
Johnson's incompetence is scary. However, Sunak's very clear dislike for the well-being of the people of this country is truly frightening. I can only hope that he never achieves his ambition of moving into Number 10.
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[…] wonder we get people like Rishi Sunak arguing that new covid boosters require the imposition of austerity. This is simply indicative of the self-serving thinking of the very rich in our […]
Sunak is positioning himself for the leadership as Mr Austerity in the same way Raab is playing to the anti libertarian right and Truss is trying to look like a safe pair of hands – a kind of comfort blanket for the traditional Tory shires. Johnson is stuffed as last night’s vote demonstrated.
I’m unconvinced of Sunak’s appeal but his ascendancy, along with Javid and others, points to a general direction of travel – the government was run for the benefit of bankers and will soon be run wholly by bankers. What last night’s vote also demonstrated was the unmanageable beast the parliamentary conservative party has become. Whoever becomes the next Prime minister, and I don’t think we are looking any further than the next three months, will be being handed a real can of worms. The silver lining in amongst the clouds for the conservatives is that the opposition is being led, if you can call it that, by the king of equivocation Sir Kier Starmer.
Very true.
This is nothing at all about saving money. This is everything about keeping it in the publics mind the erroneous idea that the government has no money.
The theory goes that, if the government has no money, then the government can not be on the hook for the pain it will impose on the population when apparently it has no choice. ‘There is no alternative’.
The worst thing about knowing MMT, is that you see the mass brainwashing of the population which makes them accept the poverty the government subjects them to.
🙂
Since Labour is so obviously scared of saying anything about QE or money creation – surely they could at least begin to poke Sunak in parliament by asking some of these questions – and force him out into the open with his economic illiteracy and class hatred.
At least that might help to bring ‘borrowing/money creation/tax’ into focus – and into the public mind. This needs to be done well before the next election.
Andrew
all it would take surely is to separate the facts from our MMT beliefs
if experienced politicians cant do this they shouldnt be in politics
i cant really say when we’ll get 21st century politicians to argue 21st century solutions
will the Labour party ever wake up again? How about starting by distinguishing microeconomics from macroeconomics?
forcibly, repetitively, & convincingly
I hope that Sunak is the nail in the coffin for society thinking that the most competent person to have in this post is some one from the private banking sector or the City of London/financial sector.
Think what would happen if we hired a known paedophile to run child protection services or a master criminal to run the police? People wouldn’t have it.
And yet we tolerate time after time what are actually sleeper agents from the private sector running government departments like the Exchequer never questioingn where their loyalties lie.
It’s a load of old rhubarb.
A very important point, PSR, and very cogently put. I may quote it, if that’s OK?
The crisis of Omicron is as bad or even worse than that faced by the Wuhan Corona crisis of February/March 2020. Then, Sunak was prepared to “spend what it takes” to get out of the crisis with the furlough scheme and other billions of pounds expenditure without bother – of course, because the Banks of England can create as much money as it wants with the touching of keyboards. His hypocrisy now is unbelievable and unacceptable.
I can’t quite shake the feeling that, although MMT teaches us that money creation doesn’t equal inflation (which is caused by supply issues), they amount to the same thing. So isn’t Sunak partially right?
Candidly, your question does not make sense
Might I suggest you go and do some reading on MMT?
I make no apology in reposting this quote from “The Financiers and The Nation” (Chapter 21) written by Labour politician Thomas Johnston:
“In the summer of 1931 a Labour Government suddenly sagged at its knees and fell dead. High Finance had killed it as High Finance will kill the next Labour Government and the next again, unless betimes the creation and withdrawal of money credit comes to be generally regarded as a State Service, even as the Navy is regarded as a State Service and one which the Nation would no more dream of farming out as a job line to a company promoter, than it would dream of farming out the Navy.”
Published in 1934.
So true
[…] It is well known that Sunak is resisting any further expenditure to tackle the Covid crisis. He was even reluctant to fund booster jabs. But what we know is that many in this country will wisely listen to the advice of Chris Whitty and […]