I posted this thread this afternoon:
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Exactly. When I give presentations on this topic, I refer to Premium Bonds and it’s easy for people to understand. The usual reaction is incredulity that buying Premium Bonds means you hold some of the Government’s Debt which will be repaid only when you decide to cash them in.
Amazing, isn’t it?
The national debt hides in plain sight – including £80+bn of bank notes
For the simple reason that <1% of the population understand this. In contrast, 99% of the population believe that the debt is something along with tax* that preceeds (and is required for) government spending.
Look on global social media at the angst that the $31trillion of US “savings” creates! We are even having the latest “savings ceiling” panto and threats of a US default over there with very serious and experience people commenting on the basis of the 99% understanding.
A lot of basic education is required here.
* one reason why I was puzzled by your recent comments on tax to fund the NHS. Why does the left still play the neo-liberal game of perpetuating this argument. Obviously the two are linked.
Won’t be long before the EU reintroduce their savings ceilings limits too….
You’ve described it so simply – why don’t I see this anywhere in the mainstream media?
I wish I knew
Now come on!
Please!
We know why.
It’s to control the narrative of state bad / private good.
It’s to create confusion and obfuscation about state power concerning money – a power that the rich are intent on having for itself. And of course ignorance helps breed fear – as all good fascists know.
The MSM just want to reflect our ignorance back at us – they don’t want to help us understand things!! As long as they can get you to look at their stuff and read the adverts too. Why bother!!
This Richard – after all – is why you are here isn’t it?
Well – I hope so!
It took a few reads of your blogs for me to understand this, but I got it.
The video you posted some time ago breaking it down into parts [QE, Bonds etc] helped me more than anything else. I have been using that example whever someone I know questions the size of the national [non] debt and when explaining it to my adult kids.
Keep plowing on and the Overton window will move.
Thanks
Can you tell me which video that was with the link? Thanks
My guess (as I’ve used this video as a basis, too) is it’s this one: https://www.youtube.com/watch?v=d-UTNHZXgKY
Thanks
Reposted
Thanks
Kaal Rosser is correct. That’s the one I was referring to.
I shall share again.
Thank you.
My first response was why the heck can’t we have a grown up debate about ANYTHING??…. but it is strange how discussions about the “national debt” deliver so much silliness.
Once upon a time in the days of the gold standard (1930s)… or possibly up until the US went off the gold standard (over 50 years ago) the size of the national debt might have mattered in the “ordinary sense” that debt matters to private sector players. But 50 years is a long time for us to cling to outdated ideas.
I see gilts (and NS&I) as a way to add/drain reserves for the system . Along with government spending and taxation it keeps the amount of “spending power” in the system at a level consistent with a inflation and other economic goals.
So its size (and its changing size) does matter – if the supply of gilts to the private sector is too low, rates will fall and we run the risk of asset bubbles; if the supply is too great rates will rise to high and choke investment.
In short, managing the National Debt is all about optimising the use of real resources in society. Small is not necessarily “good” or “bad” it is just one tool (of many) that the government has to deliver an environment where people can lead fulfilling lives.
Agreed
This gives the impression that the average guy in the street is the biggest lender to the UK Government, whereas UK individuals directly own less than 9% of net debt.
Richard has also been a great advocate of Quantative Easing (QE), which ends up with the Bank of England being a very significant lender to UKGov (39% of gross debt). To follow down this path, we need to understand where the Bank of England gets its funding (e.g. in central bank reserves), and who are its creditors.
https://www.icaew.com/insights/viewpoints-on-the-news/2022/sept-2022/chart-of-the-week-uk-public-debt#:~:text=HM%20Treasury%20owes%20%C2%A32.1,1%2C355bn%20to%20external%20investors.
The right hand column of that chart makes absolutely no sense at all
All I heard at 06:25 on R4 this morning is that ‘investors did not want to invest in the UK if it was saddled with too much debt’.
It was if 2008 did not exist at all.
A re-writing of history and fact at that time listened by a hell of a lot people on BBC of all places.
A totally false narrative at scale.
True
Whe people save with a bank nobody panics – because the Government guarantees the first £85,000.
People safely dave only because the Government, and only the Government is in a position, under all circumstances they can rely on to guarantee the worth of the their savings. That Guarantee requires the existence of a privileged power for Government that can only be challenged by undermining and destroying it; which is what Conservative Neoliberal Governments try to do: it is dangerous and irresponsible, which is why you can observe the consequences; the mess we are in.