Professor of Practice Pangloss

Put these facts together and the simple fact is that the UK can always repay all of its debt: if there was ever any doubt about that it could prove it could by simply just repurchasing all of that debt using QE using newly created many (which it can then require the recipient banks to deposit back in the Bank of England) and the debt problem could be immediately solved, completely By making it disappear. And if a problem can always be made to disappear it does not really exist. As a result there is no international agency, bank or bond vigilante who can in any way gang up on the UK on its debt because we have the perfect weapon to counter-attack, which is to literally get rid of the bonds. And nothing can stop us doing so, although I would not recommend doing this except in extreme circumstances.

And, because of this and because differences in UK productivity as measured in our currency and the productivity of people in other countries measured in their currency can always be adjusted for using the exchange rate, we can afford pay rises to meet domestic wage, social and economic pressure without in any way threatening our ability to repay debt: all that happens a a result if we are considered to have overpaid is that the value of our debt repayment in the hands of the foreign person who might owns it changes, often to their disadvantage, which is the exact reverse of what happens in Greece.

Put these facts together and the simple fact is that the UK can always repay all of its debt: if there was ever any doubt about that it could prove it could by simply just repurchasing all of that debt using QE using newly created many (which it can then require the recipient banks to deposit back in the Bank of England) and the debt problem could be immediately solved, completely By making it disappear. And if a problem can always be made to disappear it does not really exist. As a result there is no international agency, bank or bond vigilante who can in any way gang up on the UK on its debt because we have the perfect weapon to counter-attack, which is to literally get rid of the bonds. And nothing can stop us doing so, although I would not recommend doing this except in extreme circumstances. And, because of this and because differences in UK productivity as measured in our currency and the productivity of people in other countries measured in their currency can always be adjusted for using the exchange rate, we can afford pay rises to meet domestic wage, social and economic pressure without in any way threatening our ability to repay debt: all that happens a a result if we are considered to have overpaid is that the value of our debt repayment in the hands of the foreign person who might owns it changes, often to their disadvantage, which is the exact reverse of what happens in Greece.

What would be wondrous would be to hear the explanation of why it didn’t turn out this way for Venezuela and Zimbabwe. Both of which issued their own currency.

And yes, both of which borrowed in local currency until no one would lend to them, something which would happen to us too. Expand that money supply, gain that inflation, there will be no local currency lending.

23 comments on “Professor of Practice Pangloss

  1. three centuries of national debt and suddenly professor spud can clear it in an instant . Makes you wonder why no one thought of his genius solution in 300 years. He really shouldn’t be allowed access to an internet – it only encourages his sycophants to think he might be on to something . the man’s a menace and a buffoon.

  2. Candidly, no one has considered doing this in the past because the neo-liberal order that has shaped our policy for the past three hundred years has needed an excuse to limit the size of the state.

    It would be nice if the left’s response to Chesterton’s Fence amounted to something more than “the landlord put it up to oppress the workers” from time to time. It generally doesn’t though.

  3. I had to go over and read it myself.

    Some of the comments below that thread are off the deep end. There’s a chap, Roger Hunt, pretending to be on their side, subtly trying to get them to see sense, but all it’s doing is bigging up the conspiracy.

    Some of them really are loons. Or “playng the long game”, though not Punam Christuy obviously..:)

  4. Venezuela
    Weimar Germany
    X – sorry I cannot find a country beginning with X
    Yemen
    Zimbabwe

  5. I’ve said it before with respect to the polymath that is Murphy:

    when in the company of greatness, we must simply admit “we’re not worthy”.

  6. @john77: you can add United Kingdom to the top of that list if Spud gets his way. After that Thailand or Turkey could be in trouble!

  7. 300 years ago they did discover a wonderful way of getting rid of the national debt, they sold it to the South Seas Company. I haven’t got further than the first page of the prospectus, but I read that it’s a guaranteed sure-fire win!

  8. Tim,

    Is Murphy almost channelling a part of Toby Baxendale’s” How to Pay off the National Debt & Give a 28.5% Tax Cut”? Have you every reviewed it? I think Baxendale’s economics are sound, the politics of course are likely where the problems start (as they always do).

    http://www.cobdencentre.org/2010/05/the-emperors-new-clothes-how-to-pay-off-the-national-debt-give-a-28-5-tax-cut/

    “Consider this following programme of reform:

    Print cash and replace all the demand-deposits/IOUs that exist in the system with that cash. This means the government printing approx £850 billion in cash and injecting it directly into the vaults of the banks and into the accounts of individuals. Thus, if you deposited £100 once thinking it was “yours,” it now really exists in cash, with the bank acting as custodian of your money.

    Mandate all banks to hold your cash (100% reserved) on demand at all times.

    Wipe from the bank ledgers all the demand-deposits/IOUs as banks would not owe you money anymore. This means the “thin air” money disappears, to be replaced exactly with cash money. Note: this is not inflationary, as the cash replaces the demand-deposit which acted as money. As we have established, it is only thin-air that the banking system has created to facilitate the multiplicity of lending of the same bit of money, so its total replacement with cash would mean the money supply stays exactly the same.

    Require all banks to lend real savings that people knowingly place with banks to lend to businesses to get a return of interest and capital back when the business repays that loan. This is nice, simple and safe utility banking. This is what Mervyn King advocates.

    As you are not a creditor of the bank anymore, the banking system will only have its assets and its capital, i.e. no liabilities. This means that there never again could be a bank run.

    As for the banks, not having you the depositor as a liability anymore, they will suddenly be £850 billion better off, with no current liabilities and only assets (loans to business etc), post reform. The government can now put those assets into Mutuals, which would then immediately pay off the national debt, and leave the banks in exactly the same position net worth wise as they were prior to the reform, owned by their existing shareholders. As the national debt is still just under the £850 billion, which would be available as surplus assets of the banks, this could still be achieved.

    No national debt means no interest costs (currently £40 billion p.a) associated with paying for our borrowing. Therefore, give an immediate 28.5% income-tax cut. Total income-tax raised is £142 billion.

    A reply to it here.

    http://www.cobdencentre.org/2010/05/the-emperors-new-clothes-how-to-pay-off-the-national-debt-give-a-28-5-tax-cut/

  9. Every time I read “the simple fact is…”, I want to reach for a revolver and silence El Cuntissimo for good.

  10. Has the stupid cunt no idea that as no one else has ever thought of this, he may be wrong.

    How can anyone be that much of a dumb cunt?

  11. “a company for carrying out an undertaking of great advantage, but nobody to know what it is”

  12. “How can anyone be that much of a dumb cunt?”

    Arrogance + dogmatic socialist ideology

  13. Andy,

    To be fair nobody else had thought about plate tectronics before Alfred Wegener first postulated it.

    Not saying Spud is right, just that you can’t argue that nobody else having the idea doesn’t make it wrong.

  14. Borrow real money and pay it back with fake notes (“Lagergeld”? “Dickscrip”?)

    It’s actually brilliant in its simplicity.

    From the mind of someone clearly as oblivious to morality as it is to economics and finance.

    It reminds me of an old piece from the news section in Viz where someone boasted of having solved the problem of high fuel prices: “Just invent a pill which, when added to a tank of water, turns it into petrol.”

  15. @Theophrastus

    Every time I read “the simple fact is…”, I want to reach for a revolver and silence El Cuntissimo for good. – make sure you are a good shot otherwise he’ll produce another one of his Uriah Heep columns – you know the ones – “i’m just a humble potato from bogland who writes as the ideas take me” – i believe in truth/justice and the propagation of free money- etc etc. Don’t think my stomache could take that. Normally i would advise aiming for the head but i suspect in this case the bullet would pass straight through without touching anything.

  16. That daft bint Caroline Lucas was on Question Time claiming that civil servants were the only people who paid for their own pay rises…..because they paid tax.

    No-one asked her who paid for the bit of a civil servants pay that wasn’t tax.

    That daft bint listens to Murphy.

  17. I find it easier to get a grip on this sort of magical thinking if I scale it down to a town of about 20,000 which I conceive of having autonomous powers with regard to money
    You can see that such an entity , based on its tediously regular crop growing and metal bashing , let us say , could borrow and finance debt and it might profitably do so to build , shall we say a bridge by which means the local economy expanded to fit, you might even consider printing money for such a project although clearly it would have dangers
    As for borrowing the cost and ease of it would depend on the likelihood of the borrowing ot being paid back .You could default once but the cost for the future would be horrendous
    If you print the money to repay it you are back at the problem any debauching of any currency has which is that unless the economy expands to fit the money the money will be worth less

    I recommend this mental experiment with any economic idea

  18. “Mandate all banks to hold your cash (100% reserved) on demand at all times.”

    “Require all banks to lend real savings that people knowingly place with banks to lend”

    Those two requirements cannot co-exist in the same universe.

    “This means that there never again could be a bank run.”
    Not if the bank has lent some of that money, as required by step 2. “I want my money!” #But Fred’s got your money# “Why’s Fred got my money? Everybody to Fred’s house!”

  19. JGH
    The proposal draws a distinction between the balance of our current account and the amounts we have tied in up savings accountso that require notice to withdraw (“timed savings”). So the two requirements you mention CAN exist because they refer to two slightly different things.

    Beyond that, I’ve no idea what to think of the Baxendale Plan.

  20. I would never bother trying to convince Murphy’s online followers of anything. For people you deal with in everyday life, however, an attempted does have to be made.
    So how about suggesting a world with no money. All we have are resources, which are bartered. Would Free Stuff sounds as great if we were handing out those resources direct instead of money? Would borrowing resources from ‘investors’ sound so great if we needed to promise to repay by giving up some of our own resources? Would default, leading to being shut out from future resource borrowing sound like such a wizzo plan? Would some turd in Ely saying “don’t worry, Johnny Foreigner has suffered the loss, not us” sound so fucking reassuring now?

  21. That daft bint Caroline Lucas was on Question Time

    Why? She seems to be on every third week, whereas, if she was on proportionately to the Green’s parliamentary representation, it would be every 13 years (still too often for my taste). And if someone objects that it’s representative of votes cast, we ought to be seeing a hell of a lot more UKIP panellists.

    But then … aljaBeeba.

  22. if someone objects that it’s representative of votes cast, we ought to be seeing a hell of a lot more UKIP panellists.

    Ratio of votes UKIP/Green:
    – 2010: 3.5
    – 2015: 3.4
    – 2017: 1.1

    Ratio of Question Time appearances UKIP/Green since the 2010 election: 3.5

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