The government is now running so small a deficit that it is hardly creating enough money to meet the demand for new money to match inflation.


The reason to create more money is – as Milton Friedman pointed out, not that Ritchie would ever use anything from that source – that a growing economy requires more money. It ain’t inflation, it’s GDP.

10 thoughts on “Sigh”

  1. When government was running massive deficits while there was no inflation, what did Ritchie suggest then?

  2. Er… if you’ve got inflation you must be getting new money into the system, somewhere. Or why would you have an increase of demand relative to the goods & services you’ve buying, to push the prices?
    Or am I missing something? Does he have a whole new definition of inflation?

  3. @ bis
    Inflation isn’t high enough to destroy (it merely reduces) the value of the savings of the hard-working thrifty self-reliant individuals who choose not to be totally dependent on the Curajus State. So the government must issue more worthless paper to accelerate the rate of inflation.

  4. Oh ,wholehearted agree with you, john77. Government contrived inflation. Sufficient grounds for lynching, on its own.

  5. Not my field, but isn’t this completely the wrong way round? If we have inflation, that means money is being created faster than the economy is growing?

    In other words inflation is a sign that too much money is being created, but Murphy says it is a sign that we are not creating enough?

    As Tim frequently asks – this man is a professor?

  6. I like how he claims government running a small deficit. Perhaps he will go on to attack those calling for increased government spending.
    Oh wait, the state is all.

  7. £52 bn. Almost a thousand quid overspend for every man, woman and child resident in the land.

    Hardly “small”…..

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