So says Ritchie

Look, I know I make fun of the man but there is a reason:

I am incredibly worried about the impact of debt on society. No one is free when in debt.

This is said by the man who insists that we should borrow more money (through the government) in order to have further fiscal expansion.

So, can we objectively say that he wishes to increase our debts so as to reduce our freedom?

Or would that just be me being this appalling neo-liberal type who asks for consistency?

And barbequed babies, of course, for everyone knows that neo-liberals insist upon those.

I would have left this snark there but of course Ritchie doesn\’t allow people like me to sully his blog any more.

Tant pis.

13 thoughts on “So says Ritchie”

  1. His basic premise is correct.

    But as you point out, the large-state gang on one side love it when the taxpayer is in debt; similarly, the Home-Owner-Ist faction on the other side love it when young people are hugely in debt because houses are overpriced. And Labour seem indifferent to the fact that so many were conned into going to Uni when really they shouldn’t have done, thus ending up with a load of debts and lower earnings capacity.

    So really, every single faction is heaping debts on future generations and they’re all as bad as each other.

  2. wondering if there is a niche for a philosophical movement…I think, therefore I am not Ritchie

  3. Hmm. There’s a massive difference between individual debt and sovereign debt – the individual can’t print more money to make his debt worthless, and can’t tell his creditors to piss off with no recourse…

  4. Although, john b, you can’t print money forever if you want other countries to play with you. And the way Labour changed the law on IVAs, you’d think they were trying to allow people to default without tears.

  5. Yes, but “Ritchie” is coming from a Keynesian perspective and as you well know the Keynesian approaches to debt don’t bear any relation to the superficial version that you paint in this blog. So this is just a smear campaign.

    Tim adds: I’m not sure it’s possible to smear Ritchie given what the man himself says with a straight face.

  6. @Christie – AIUI, IVAs put English bankruptcy law in line with US bankruptcy law.

    And no, you can’t – but there’s a lot of scope to erode a lot of debt through 10-20% domestic inflation, which isn’t enough to make everyone think you’re crazy, but is enough to cut the value substantially. This has worked well for Brazil and India in the past – though obviously only in the medium term…

  7. Also, Ritchie isn’t coming from a ‘Keynesian’ perspective, he’s coming from an ‘angry of Tunbridge Wells’ perspective. He isn’t an economist, he’s a man who knows a great deal about the specifics of tax accounting and has lots of other views that aren’t really based on much sensible.

    I’m a Keynesian. I’m embarrassed by Richard Murphy, and the way in which the press tend to print his daft views as a serious example of Keynesianism. It’s the equivalent of someone dealing with the (serious, real) debate on pharmaceutical marketing pushing too many overpriced lifestyle drugs based on cherry-picked trials that don’t reflect real clinical benefits over generics or non-pharmaceutical responses, by interviewing a loony quack like Gillian McKeith.

  8. Whoa…

    “…he’s a man who knows a great deal about the specifics of tax accounting…”

    That’s just flat-out wrong. Ritchie’s commentary on U.S. and international tax and accounting issues are consistently marred by material errors of fact. From the perspective of this C.P.A., reality is this: Richard Murphy cannot be considered even marginally competent in matters related to U.S. and international taxation and accounting. And quite frankly, I’d be surprised if he was any better versed tax and accounting as it relates to English standards and law.

  9. Remind me never to buy any govt debt if John B is in charge of the country in question…………………………….would make in interesting prospectus – Buy our 10 year Gilt – pays 5% interest and your capital back at the end. Of course your capital may not buy you a cup of coffee in 10 years time, but hey, at least you get some bits of paper with the same numbers on you started with eh?

  10. The reason why governments treat debt differently is that they have the power to tax – which is ultimately based on the threat of jail or worse; they have the ability to print money, and the monopoly over the issuance of said money.

    Which of course is one reason by it is unlikely, barring a massive crisis, that any government would voluntarily re-introduce something like a gold standard, or allow choice in currencies, etc, since their ability to raise oodles of debt without a proven policy or repayment would collapse.

    Bring back honest money, and the kind of absurb property speculation that Mark Wadsworth dislikes would also be far less likely (although I would not rule it out, of course).

  11. Yes there are plenty of areas where one might disagree with Murphy; I find plenty of them myself; but the point is that Worstall got his blog wrong by painting a false picture of what Murphy was saying. So ‘fess up and move on, I say.

    Oh, and the gold standard eh? Please. Governments really don’t need to behave like households, and there is no reason why they should. It got ditched for a very good reason. Something called democracy.

  12. “Governments really don’t need to behave like households, and there is no reason why they should. It got ditched for a very good reason. Something called democracy.”

    Governments don’t need do bwhVe like households, but that does not alter the fact that they shoulD

  13. @dennis: his background is in tax accounting for English SMEs, and he was senior partner in a firm in that area. I strongly suspect that he knows a lot about that.

    I agree he knows no more than the average educated layman about MNCs and non-UK taxation – that’s the same point I was making. His narrow expertise is used to herald him as a much broader EXPERT AT STUFF.

    @sobers if I was in charge of the country in question, I’d lie that I wasn’t going to do the inflation thing. See: the UK government.

Leave a Reply

Your email address will not be published. Required fields are marked *