{"id":43955,"date":"2019-01-08T08:45:42","date_gmt":"2019-01-08T08:45:42","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=43955"},"modified":"2019-01-08T08:45:42","modified_gmt":"2019-01-08T08:45:42","slug":"not-understanding-money-and-government-finances-should-be-a-disqualification-from-offering-economic-commentary","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2019\/01\/08\/not-understanding-money-and-government-finances-should-be-a-disqualification-from-offering-economic-commentary\/","title":{"rendered":"Not understanding money and government finances should be a disqualification from offering economic commentary"},"content":{"rendered":"

Rafael Behr has a comment\u00a0piece in The Guardian this morning<\/a> under the title:<\/p>\n

\n

At the heart of this NHS cash boost lies a dishonesty: tax<\/strong><\/p>\n<\/blockquote>\n

His argument is:<\/p>\n

In\u00a0her speech<\/a>\u00a0on Monday, May boasted that the new plan involved \u201cno increase to people\u2019s taxes\u201d. That should set alarm bells ringing. In no other field do leaders get to conjure multibillion-pound investments from thin air. But British politics is steeped in the fiction that good things happen by magic.<\/p><\/blockquote>\n

So The Guardian is employing a commentator who does not understand that governments have to spend before they can tax, or the money to be taxed does not exist.<\/p>\n

And who does\u00a0not understand as a result that the\u00a0spending\u00a0pays for the tax.<\/p>\n

Or that there is such a thing as a\u00a0fiscal multiplier, and that it is very large in the case of the NHS, meaning that this spend may well recover more tax than it costs.<\/p>\n

Let alone that\u00a0governments\u00a0may quite legitimately\u00a0run deficits if they so wish.<\/p>\n

And that they need to do so as a matter of fact to create the money that the\u00a0economy\u00a0requires.<\/p>\n

Whilst\u00a0apparently being unaware that\u00a0the government and\u00a0the rest of the economy are fundamentally\u00a0different precisely\u00a0because the\u00a0government can\u00a0create\u00a0fiat money, at will. It is, after all, just a\u00a0government promise to pay.<\/p>\n

All of which is really\u00a0rather worrying.<\/p>\n

And should be a\u00a0disqualification from\u00a0commenting on economics. But apparently isn't.<\/p>\n","protected":false},"excerpt":{"rendered":"

Rafael Behr has a comment\u00a0piece in The Guardian this morning under the title: At the heart of this NHS cash boost lies a dishonesty: tax
 Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[],"class_list":["post-43955","post","type-post","status-publish","format-standard","hentry","category-economics"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/43955","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=43955"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/43955\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=43955"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=43955"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=43955"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}