There really is a magic money tree

35 thoughts on “There really is a magic money tree”

  1. The only reason the NHS is ‘underfunded’ is because it has unlimited demand and poor rationing mechanisms. It has and always will be ‘underfunded’

  2. There’s little doubt Twatter’s the internet equivalent of scrawled messages on the inside of a public convenience door.
    “Mary Murphys a great shag”
    “Whats mary’s phone number?”
    “Mary Murphy’s got the crabs!!!”

    That supposedly intelligent people spend considerable time doing it is astounding.

  3. In this week of proof of gravitational waves, may I propose another fundamental equation:

    Richard Murphy = thick cvnt

  4. I don’t understand the second sentence.

    He’s suggesting that if a publican gives a sailor £100 to spend on the piss in his pub, by the end of the night the publican will have turned a profit on the transaction.

  5. Twatter is about Murphy’s level. It fits his preference for dogmatic assertion applauded by a small group of angry sycophants.

  6. “Spending on the NHS when have less than full employment creates the funds to pay the tax”

    Is he implying that Gav from Dalton is exchangeable in labour to a doctor?

  7. Murphy once told me on Twitter you didn’t need tax to pay for the NHS. Well, economically you don’t; politically you do. He suggested I didn’t understand the ‘duality’. He’s right; I only understood the lies.

  8. After taking several minutes to try to understand how this could work I am at a loss.

    Let’s say that the NHS borrows £100,000 to pay a doctor for a year. Around £10,000 of that should be taxed to pay to fund NHS. That leaves the remaining £90,000 to be spent. As the money is spent the recipient will also pay 10% in taxes to fund the NHS. Lather, rinse, and repeat however many times you want and taxes will never recover the full £100,000 originally spent. For services there is just no way to ever recover the investment.

    I can only come to the conclusion that Murphy has no clue how providing a service differs from providing a physical improvement.

  9. @ Theo
    “Twatter is about Murphy’s level. ”
    Twatter threads always look to me like overhearing a bunch of women chatting on a bus. They’re all talking but none of them seem to be listening.
    Has anyone, ever, shown a change of opinion on a Twatter thread? Ever?

  10. rough calculation for spending to pay for itself you need a ‘fiscal multiplier’ of >2.5, I think (I am thinking you spend £1 economy expands by £2.5 you tax back 40pct of it.

    empirical estimates of fiscal multipliers are all over the shop, some get to around that level in some circumstances

    http://www.sciencedirect.com/science/article/pii/S0261560614002046

    even if you believe those numbers, whether those circumstances apply now is another question

  11. The only time the NHS pays for itself is when they heal workers so that they can get back to work sooner. That’s the equivalent of the publican giving out free shots at the start of the night in the hope that punters will spend more later.

    Obviously if it’s worthwhile for the worker to pay for their own healthcare and get back to work sooner then they will; but our single-provider healthcare system has almost eliminated paid alternatives.

  12. Even if this is slightly feasible (spending on NHS generates taxes ?) why does the level of employment make a difference ?

    Is it me or is this tosh ?

  13. “our single-provider healthcare system has almost eliminated paid alternatives.”

    Tell me about it. There’s no shortage of money to pay, but actually finding private healthcare suitable for my father at the moment is a nightmare. All the private hospitals just want to do boob jobs and hip replacements in otherwise healthy people. No-one will take a blind old man with Type 1 diabetes who needs 24/7 care plus a serious course of physio to try and get his mobility back, regardless of how much money we offer to throw at them. The NHS has fucked the entire system up.

  14. Thank you for pointing me to that paper Luis. Now to find that site that provides Elsevier papers for free. There is no way I’m paying $35.95 for a paper which might be useless to me. The abstract basically says for what Murphy is claiming to be true then we must be in the middle of a bad recession.

    Andrew that is a valid point. I also left out the costs of collecting taxes and administration. At least the NHS produces better results than the US system at a lower average cost.

    One safe assumption to make is that there has been more thought put into the comments on this blog than Ritchie’s original twat.

  15. “At least the NHS produces better results than the US system at a lower average cost.”

    It doesn’t though. It provides worse outcomes at a lower average cost. The NHS is just not as good as other systems at actually keeping people alive.

  16. As an approximation taxation is about 45% of UK GDP and the value of imports is 20%. If you print 100k and spend it on stuff that isn’t worth 100k, then it only takes 1 iteration to get a net loss to the economy in money terms at least.
    Aah, but a socialist might advocate a closed economy, with no imports, which currently has to mean a one world government. For Ritchie’s argument to fail here, you have to show that apart from ‘public goods’ government doesn’t allocate resources or promote productivity ( or happiness for that matter ) as well as the free market.
    Which is easily done with a tight definition and reference to a few examples, but tricky in the case of the NHS as for example fighting communicable diseases is a ‘public good’, but fools like Ritchie assume that all activities of the NHS are ‘public goods’.

  17. “Twatter threads always look to me like overhearing a bunch of women chatting on a bus. They’re all talking but none of them seem to be listening.”

    Perfect.

  18. Henry Marsh,

    Given the re-emergence of tuberculosis in parts of London, I suggest that the NHS has rather failed in fighting communicable diseases.

  19. Surely the re-emergence of tuberculosis has to do with London now being substantially populated from TB-prone countries like Pakistan, rather than any failings on the part of the NHS.

  20. This has the ring of something you might end on the KCNA website – however, it is standard fare from Murphy and his supporters – apparently the 1997 -2010 regime ‘invested in World Class public services’ – for them, expenditure automatically equals investment – most of them have not got a clue how to read a balance sheet…..

  21. The UK health system is better at keeping /a wider spread/ of people alive. The US healthcare system is better at keeping alive the much smaller proportion of people who can afford to partake. I’d take 100% of people getting 90% better than 30% of people getting 100% better any day.

  22. “for them, expenditure automatically equals investment ”

    Oh: were you looking over my shoulder today? I was talking some senior finance and management types in a housing association through the creation of business cases for project expenditure and initiation.

    No concept of value. Plenty to discuss around rules for capitalising expenditure, but no clue about benefits realisation to prove their desire to capitalise.

    I was reduced to motoring/shopping analogies. I am currently sobbing into my beer in a cheap hotel in the fens.

  23. Also: I’m about 25 miles from downham market, or wherever Ritchie lives. I’m worried it’s something in the air. I’m seriously considering putting a wet towel along the bottom of the door.

  24. John Square, I’ve been there. It is soul destroying trying to explain why investment needs returns….. I used to get bored and hold my handset to my anus. Maybe that’s why I am jobless.

  25. rules based benefits for a business case tends to cause problems as well, usually a failure to acknowledge the cost of consequences. Replacing infrastructure tends to have consequences if not done rather than direct benefits.
    Being able to articulate what will happen if something is done and the consequence if not is the really important part, after that you just have to game the ‘returns’ rules. Sadly lack of understanding of value is all too common

  26. Bnic, that is so true. Invest, or watch service go down the pan and pay fines. It depends on the cash the group is generating. If they can’t do it right they will gamble.

  27. Ian B

    What? The multiplier is simply the answer to the question, if the government increases spending by 1, how much does GDP change? Answer could be zero, minus, or positive. It is an empirical question, saying no such thing is nonsensical.

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