{"id":90841,"date":"2026-03-13T08:38:27","date_gmt":"2026-03-13T08:38:27","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=90841"},"modified":"2026-03-13T09:03:14","modified_gmt":"2026-03-13T09:03:14","slug":"the-truth-about-the-magic-money-tree","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2026\/03\/13\/the-truth-about-the-magic-money-tree\/","title":{"rendered":"The truth about the \u201cmagic money tree\u201d"},"content":{"rendered":"

We have published a short video on YouTube and many other channels last night, <\/a>which refuses to embed here, so please click the link to watch it.<\/p>\n

This was the message:<\/p>\n

\"\"<\/p>\n

I did, of course, challege that narrative in the video<\/p>\n

This is the transcript:<\/p>\n

\n

You\u2019ve heard it being said time and time again. Politicians say there is no magic money tree. They repeat that whenever spending is questioned. But here\u2019s the truth: there is a money tree, you are just being told it doesn\u2019t exist.<\/p>\n

In simple terms, the UK government creates money every time that it spends. It instructs the Bank of England to make a payment, and the Bank of England increases its overdraft, and doing so, it creates money because that\u2019s what happens every time any bank anywhere creates an overdraft.<\/p>\n

The government always spends first and then taxes later. Taxes, as a consequence, don\u2019t fund spending in the way that households fund bills. Government money isn\u2019t found, it\u2019s issued.<\/p>\n

Money creation happens whenever the government spends, but it\u2019s most apparent during financial crises, during pandemics, and when stabilising banks or markets. In those situations, the government always spends, and nobody asks \u201cWhere does the money come from?\u201d Why? That\u2019s because they understand implicitly that the Bank of England has this capacity to provide money to the government whenever the government wants it. Get this wrong, and you cut support when it\u2019s most needed.<\/p>\n

The phrase \u201cNo magic money tree\u201d isn\u2019t about economics in that case; it\u2019s about political framing. It\u2019s meant to make public spending sound reckless when the state can and does create money every single day.<\/p>\n

The real question is not can it do so, but who it\u2019s created for, and why?<\/p>\n

Those are the questions we need to ask. We don\u2019t need to deny the truth that the government can create money in the process of doing so.<\/p>\n","protected":false},"excerpt":{"rendered":"

We have published a short video on YouTube and many other channels last night, which refuses to embed here, so please click the link to
 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":[35,174],"tags":[],"class_list":["post-90841","post","type-post","status-publish","format-standard","hentry","category-economics","category-modern-monetary-theory"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/90841","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=90841"}],"version-history":[{"count":6,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/90841\/revisions"}],"predecessor-version":[{"id":90887,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/90841\/revisions\/90887"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=90841"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=90841"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=90841"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}