No, still not doing any better:
This has two consequences in this context. In the first instance any limitation on borrowing might mean that there could be a credit crisis in the economy and the government will be unable to deal with it because it would have announced in advance that it could not : that would be ridiculous. But more important, what being borrower of last resort means is that the government actually has no choice but to meet the demand for cash in the economy: that is its role, as I have explained in this paper and elsewhere. What this means is that government borrowing takes a residual position: in other words the government has to lend what borrowers demand because it is the creator of cash but what that also means is that to say that it will limit its borrowing is to state a tautological impossibility: it denies the reality of the governments position in the economy as it is pretending it will not create money when in truth that is exactly what it has to do, come what may.
“Money” and “credit” are two different things. “Money creation” and “borrowing” are two different things.
What’s happening here is that Ritchie is very taken with the idea that we can just replace the credit creation system of the banks with the direct issuance of money by the government/central bank. It’s central to his reading of Modern Monetary Theory and thus to PQE. But this is where this all ends up….the contradictions of those views appear elsewhere in the “thinking”.
Sure, of the Bank of England stops issuing pound notes of M0 then we’ve a problem. But that’s completely different from Ritchie’s insistence that if the government stops pissing away the cash then issuing gilts that the economy will seize up. And he really does mean that latter. He says that paying down the national debt is destroying money. And that will inevitably causes disaster.
He’s just not able to see that it’s that first set of assumptions about MMT which is leading him into the subsequent error.