It’s time this country understood economics
There is much discussion in the media this morning on Amber Rudd. The rumour is she will replace Philip Hammond as Chancellor after the election.
Well, that is terrifying, yes. But:
First she made allusion to Monopoly, implying (without giving any hint that she had ever played the game) that there was a finite supply of money. I tweeted in response:
Richard Murphy @RichardJMurphy 13h13 hours ago
I have news for Amber Rudd: there is a magic money tree. It created the £435 billion used to fund QE, entirely without cost to the taxpayer
Ah, yes. And that’s where we have to get back to all that stuff about base money, wide, credit, and the monetisation of debt. Because there is still this horrible mistake at the heart of Ritchie’s understanding here. For you can indeed create as much base money as you like at zero cost. But if you go and spend it into the real economy – note QE specifically and deliberately did not do that – then you will have a cost. Soaring inflation. This is the Zimbabwe/Venezuela plan.
And Ritchie will come back with Aha! MMT! We just tax back that excess money creation to avoid the inflation!
And taxing it all back will not be a cost to the taxpayer, eh?
But he, as ever, gets more delusional:
Sean Danaher has suggested over on Progressive Pulse that now is the time for work on an Economics 101 programme and I agree with him. But I wonder if the implicit assumption, that this be pitched as a basic undergraduate course, isn’t too advanced. This country is nowhere near GCSE understanding on economics right now.
I think a year 9 course would be much more appropriate than a text at an undergraduate level introduction as a consequence. But that is actually quite tough to think about. That requires very precise structuring, the introduction of big ideas in small chunks of text, and yet the integration of the themes into an overall narrative. The prize may be worth the effort. But I have noi idea if I have the time.
It’s not your time we’re worried about matey. It’s your knowledge of the subject under discussion.
Perhaps if we mentioned that the writers of basic GCSE textbooks make vast sums of money he’d go and do that instead of bothering the rest of us for vermine?