The gift that keeps on giving

Ritchie meets a comments section not moderated by Ritchie:

Paul Rowntree
In reply to Anthony Nordberg
Professor Murphy wrote above:

“If most economists think deficit reduction so important why have we had a national debt almost continuously since 1694 and prospered because of rather than despite it?”

Some students might be reluctant to pay to be taught by a Professor of Practice in International Economy who evidently doesn’t understand the difference between the deficit and the national debt.

2 hours ago
Richard Murphy
logged in via Twitter
In reply to Paul Rowntree
This is extreme pedantry

Deficits created the debt

And if you know anything at all you know deficits have been run in most years since 1694

But that’s a good thing – that’s how the government creates money

And that’s how the government meets the demand for gilts to underpin pensions

We desperately need public sector debt – in fact, more than we have

Just for those who want to know, there’s good argument that at times we might want to have deficit spending. There is no valid one that we need a national debt. It might be useful, sure, but we don’t need one. And the idea that we need more as it approaches 90% of GDP…..again, it might be that economic circumstances mean that we’d like more deficit spending (no, I don’t think so but it is possible) but more debt just to have more debt?

26 thoughts on “The gift that keeps on giving”

  1. His argument that the government runs deficits so that it can supply finance to pension funds by issuing gilts is one of the more bizarre stretches of reasoning to emerge from the Fat One’s fists

  2. Diogenes

    His argument that the government runs deficits so that it can supply finance to pension funds by issuing gilts is one of the more bizarre stretches of reasoning to emerge from the Fat One’s fists

    Isn’t it just standard MMT bollocks? Gov’t debt is savings to non Gov’t, therefore we are all getting richer and wealthier…

    Sort of misses the very obvious point that governments tend to “piss their spend” (diversity and masses of other waste), whereas if those same people were employed outside Gov’t, actual real wealth / value is more likely to be created.

  3. I’m wondering if he has jumped one shark too many – the comments section is brutal beyond belief. I am assuming Paul Rowntree and Anthony Nordberg are of this parish. He’s now introduced the term ‘Alt right’ to describe people more informed than him. It’s quite pitiful to watch actually….

  4. Murphy is not new or original in his half thought out ideas, or his love of the accounting identity for GDP.

    “I think it is safe to say that we are still suffering the harmful effects of the Clinton budget surpluses,” says Stephanie Kelton, an economics professor at the University of Missouri Kansas City.

    To understand why, you first need to understand that the components of GDP looks like this:

    {GDP} = C + I + G + (X – M )

    In the above equation, C is private consumption (spending). I is investment spending. G is government spending. And ‘X-M’ is exports-minus imports (essentially the trade surpus).”

  5. Do they have a psych department? I can find a fascinating subject whose public utterances can provide tons of research papers.
    If they ever do a new stage show of Jesus Christ Superstar this guy could play whatsisname, washes his hands, asks ‘what is truth’, named after some exercise thingy…. Pilates?

  6. Bloke in North Dorset


    Martin Audley
    You managed to argue against yourself in the same paragraph:
    “But the debt now being sold is in effect for students who left university up to 15 years ago, much of whose study has been funded by the state. It provided the loans to the students involved and only now will it see any significant part of many of them being repaid…The state is not then being refunded for the cost of these people’s education”
    If it’s a bad thing that the Government funded university for students and is only receiving the money after 15 years, then the opposite – to sell the debt and get the money earlier – is exactly what you’re arguing for. And refunding the cost of these people’s education is precisely what selling the debt does.

  7. Diogenes

    He’s misunderstood the idea that the availability of a risk free asset is useful for long term investors as being “underpinning” for pensions. The HKMA chose to issue bonds basically as a way to deepen local bond markets and to help match liabilities with assets:

    But the availability of government is not a necessity – you can imagine a world where investors bought other investments instead. Just another thing where his lack of knowledge is laid bare.

  8. VP

    “…the comments section is brutal beyond belief…. It’s quite pitiful to watch actually….”

    And hilarious! Spud has spent so much time and effort insulating himself from criticism, and ensuring that he is surrounded on his blog by sycophants who raise paeans of praise to his brain farts, that he clearly cannot cope with any disagreement. Perhaps he’ll hesitate in future to post his dross on open forums.

  9. Theo

    I am wondering if he is losing it. It’s if anything even worse than the famous blog by Jolyon Maugham. He memorably wrote a famous piece following that debacle on why basically people who disagreed with him ‘had nothing to contribute to the debate’, with Tim coming in for particular criticism. My guess is there is a limit to the appeal of being fawned on by sycophants and staying in an echo chamber.

    If anything it was a useful exercise to see how weak his intellect is. It really is like seeing a GCSE student attempt to act like a fully fledged academic. For a 59 year old its truly embarrassing…..

  10. Infamy, infamy! You’ve all got it in for me!

    Congrats to all for the excellent public and uncensored spit-roast and fisting of the repulsive fat twat.

  11. VP

    He’s blogged about his experience on The Conversation – under the heading “My Deeply Libertarian Instincts” – and he blames our host for orchestrating the “bullying”.

  12. Complete this sentence from the Bank of England: …”the majority of money in the modern economy is created by….”

  13. “Pixies”

    Actually, I think you’ll find they are mainly neo-goblins (and a few champagne swilling death eaters).

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