The situation in the Middle East looks to be very volatile. Israel's attack on an Iranian embassy has given rise to an almost inevitable counter attack. No one's actions are justified, let alone proportionate. I condemn the aggression on all sides: there are always better ways to solve disputes. No one knows what will happen next, barring one thing that is.
What I can guarantee is that whatever the cost of military action might be, the money to pay for it will be found.
The magic money tree at the Bank of England will be shaken in the short term, as it can always be.
In the longer term, more bonds will be issued.
So-called government debt will increase.
And all because payment will have been made for military action undertaken at ministerial behest for which Parliament will never be asked to give sanction.
In the short term, no taxes will rise and no other spending commitments will change.
Later, that might alter because the increased debt will be used as yet another excuse to impose austerity by those always looking to find one, even though the cost will already have been paid for and the debt need never be repaid.
So why note all this? Simply because what it proves are three things.
First, spending not only can, but always does precede taxation.
Second, spending capacity can always be found whenever it suits a politician to find it.
Third, there is no reason why such costs need suppress other spending. They are exceptional, but also affordable: if there were not the capacity to actually undertake the military activity then the cost could not have been incurred.
So what's the point of saying all this? It is simply to point out that the scale of government spending, and what it is spent on, is always a matter of political choice, but that the capacity to fund the choices made can always be created if the ability to undertake the chosen activity it is to be spent on actually exists.
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:
It is puzzling why the UK needs to take military action on behalf of Israel wrt the Israel – Iran dispute. Is Israel paying the UK to take part? What does the UK get out of it? Both countries are a very long way away (3200kms & 5000kms).
This is probably the only media outlet which will comment on this in terms of gov’ money and where it comes from. It does beg the question: given 12 million in absolute poverty in the UK – why is the UK using/diverting costly military assets on behalf of a country a very long way away, with which we have nothing in common.
Foreign adventures are always a useful diversion from problems at home – although “problems” is hardly the word to use,….. “shit-filled rivers, vast numbers of people in poverty, crumbling schools, crap transport, collapsing local gov, health system falling apart”………” – but there is money for military adventures – whilst claming that the gov piggy bank is empty – boohoo, Bunter spent it all. & from the MSM – dead silence.
On the question – why does the UK intervene on behalf of Israel – surely the decision making resides in the Conservative cabinet or those very close to it. Perhaps if the personal motivations of those individuals who are in that decision making group are examined in detail then we could better understand why that course of action has been taken.
Quite right Richard. As an increasingly cynical utterly fed up citizen (not ******* subject monarchists) of the UK this is what I say to people when discussing government spending; politicians can always find the money for things they want to spend it on and conversely, they always say “we can’t afford it” for things they don’t want to spend money on.
One slight caveat to this is that it depends on the country involved buying the weapons with its own currency. If the UK wants to buy bombs or missiles priced in US dollars or Euros then it needs to have some of those currencies and simply running up the Bank of England overdraft or issuing sterling bonds may not be enough.
I think we’re a net arms exporter, so I am not convinced that is an issue. Nor is there evidence of sterling collapsing as a currency for the time being. I think you might overstate your case.
Thank you and well said, Richard.
Whenever asked how whatever I’m rabbiting on about will be paid for, usually health or education, I usually reply the same way as we pay for defence (or imperialism as much of it is). There’s always money for war.
My family have been serving God, King / Queen and Country since the second South African war. My great great grandfather married a PoW he met at her camp soon after Treaty of Vereeniging. She did not return with her family to the Orange Free State after the war. In the 18th century and until 1810 and the British invasion, the family fought for France. The veterans laugh at chicken hawks.
“I think we’re a net arms exporter”.
I think you are right. And how! According to the House of Commons Library –
“The total value of SIELs [Standard Indivudual Export Licences] issued [was] around £9.1 billion (13%) for military goods [in 2022].” (Heavily edited inside the square brackets for clarity).
Whereas, from the the World Atlas –
In 2022, arms imports for United Kingdom was 799 million US dollars.
Although I’m not sure that’s anything to be proud of.
Excellent point Richard. Terrible circumstances, but proponents of MMT should make more of this universally accepted fact. To use another example, if there is the threat of invasion by Russia are we obliged to surrender because there is no money left to buy bullets or launch the nukes?! If that doesn’t make people stop and think about the reality behind MMT, I don’t know what will.