He actually believes this shit

There is a very particular reason for this: unless a government of this particular sort that is actually responsible for creating the money that is in use in its jurisdiction first actually spends its currency into the economy by, for example, buying goods and services from people and businesses within it, then those people and businesses would not have the currency that they would need to pay the tax that is owing in that same currency.

This rather jars with the other insistence, that 97% of money is created as a bookkeeping exercise by banks.

The two cannot both be true. Either governments create all money in existence in which case, sure, government must create money before money can be used to pay tax, or governments don’t create all money, banks create a lot of it, in which case government money creation is not required for the payment of tax.

Single stump thinking.

And guess what:

Critically, the books of a government that is in this situation of having its own currency do not need to be balanced: instead the objective of a government in this situation is to run whatever deficits or surpluses are necessary to control the level of inflation which is arising within that economy, taking into consideration any desired inflation rate that they might decide upon. So, for example, if they have a desired inflation rate of 2% and the actual rate is 4% per annum then they will want to slow down the rate of growth in the economy, and will as a result wish to run a government financial surplus, or in other words, collect more cash in tax than they actually spend in cash terms during the course of the period. This has the net effect of withdrawing money from the economy, so reducing the purchasing power of people within it. This will necessarily mean that there is less money available to buy goods and services within the economy, which will reduce the pressure on prices, and so bring inflation back under control.

The suggestion ain’t never gonna be that a Curajus State might reduce expenditure now, is it?

22 thoughts on “He actually believes this shit”

  1. Bloke in North Dorset

    Inflation is a rearward looking measure so by the time its been measured its already happened. This means government has to act quickly to stop it setting in so emergency budget is likely. It also means means that whatever tax rises they propose have to be almost instant so that means either basic income tax or a rise in VAT, everything else won’t have any serious impact.

    SO now workers have seen their standard of living eroded by both inflation and tax rises. Does anyone seriously think that the unions will accept this? The representative of doctors, nurses, civil servants and every worker clamped to the government’s financial teat will demand above inflation pay rises.

    And if his MMT policy has been accompanied by the favourite left wing policies of nationalising everything in sight that will be even more workers demanding above inflation pay rises accompanied by strikes.

    We don’t have to go back too far in history to see how badly this ends.

  2. o/t but relevant. I see the spud is still bleating about his economic circumstances and is still grubbing around for grants. Meanwhile each day I get bombarded by Job adverts looking for delivery drivers or pickers for variuos supermarkets. If i wasn’t placed in the extremely vulnerable category i’d leap at the chance to supplement my meagre pension. According to the potato he’s already had Covid 19 so he’s safe to work. Lazy fuck would rather steal money in grants that could be put to more useful ends than lower himself. It would stop him turning out this bilge.

  3. “SO now workers have seen their standard of living eroded by both inflation and tax rises. Does anyone seriously think that the unions will accept this? The representative of doctors, nurses, civil servants and every worker clamped to the government’s financial teat will demand above inflation pay rises.”

    This, Mr in ND, +100: given the nation’s collective saucepan-banging frotting over the NHS, how resistant can this government be when, in due course, the inevitable NHS demands for more pay come in?

    “But you told us we was angels, innit”.

  4. Lazy fuck would rather steal money in grants that could be put to more useful ends than lower himself.
    Moqifen, I’d give him 3 hours before a co-worker twatted him purely based on his obnoxiousness. Besides, Herr Oberst Kartoffel would insist on a supervisory role in order to make everyone else’s working life as miserable as his own.

  5. The only explanation I can think of for his constant twists and turns of thought and contradictory statements is that he is too damned stupid to understand the words he is no doubt cutting and posting from some other person’s work.

  6. “how resistant can this government be when, in due course, the inevitable NHS demands for more pay come in?

    “But you told us we was angels, innit”.

    Yesterday evening we had yet another convoy of police, fire & civil emergency vehicles pass through – lights flashing, sirens braying – while people stood on their balconies applauding. Seems to be a regular PR stunt. Standing in the queue at the supermarket checkout waiting for the masked, gloved, girl to deal with the preceding shoppers, this morning, I was thinking if anyone needs clapping it’s the workers in the shops & the logistic chain that feeds them. If the police, the fire service, even the hospitals had shut up shop, how bad would it have been? Yes there would have been deaths. A lot of them. But if the cities hadn’t been fed? You’d have said goodbye to civilisation. This place would be anarchy & a war zone by now.

  7. Totally agree BIS. You can see that some of the people on the tills are scared as hell. Mind you, the hardest thing about shopping is trying to keep my distance either from the staff clusters at real choke points within the store or from twats in masks milling around oblivious to their situation while yakking on their phones

  8. @BiS
    Which is why I’m unfailingly polite to the poor sods in the shops who have to do the whole Song and Dance.
    They can’t help it, and it’s a small matter of exercising some face and throat muscles into a semblance of pleasant politeness to make their life less shitty.
    Because some of the scenes you see….. Poo-flinging psychopathic chimps are more polite than some people…

  9. Incidentally…… Didn’t a certain late sir Pratchett write a book about the exact conundrum of money and economy?
    And has anyone ever suggested cpt. Kartoffel read it? Might be above his level of understanding though, and it contains “humour”, which might be against his Quaker Convictions…

  10. Many of the extra staff here seem to be age 16+ school kids that are taking advantage of not being at school
    If they can risk working at the food stores it’s a shame the teachers can’t go back to work so the schools can open instead

  11. His Spudness could easily have been written by tPratchett. He definitely belongs in the fantasy section.

  12. I’ve given up on social distancing. On my daily walks, I walk as I wish and enjoy the sight of people getting out of my way.

    Which is just as it should be.

    My punishment may end up being death, we’ll see. But I am bored of waiting for the promised hecatomb. It just ain’t here.

  13. Grikath & Lud – poor sods on tills and silly sods on pavements +1 🙂

    Diognees, I find that interesting too. Within the stores, staff working together make zero attempt to keep any sort of distance from each other. As others have noted, the science appears to suggest 1m not 2m (2m is simply more caution, and even 1m is v unlikely?), maybe the shop staff intuitively know more than the punters?

  14. The locaL version of ask the nhs,111 or whatever it is has marked arrows around the office so staff can only walk in one direction and don’t have to pass each other.
    It is basically a large, air conditioned internal open plan type office (think call centre) so the advantages of this arrow scheme are pointless, but it’s seem to be doing something.
    Bit like having a one way system on a plane, can only walk up one aisle and down the other

  15. BiS–according to Jeff Taylor the haulage industry–and thus food deliveries–is circling the economic drain. If it goes then it will be squaddies handing rations out the back of trucks 3rd world style–try that for a panic-maker.

    The level of smug BlueLabour arrogance this govt of mugs displays is breathtaking–once folk get they have been ruined over a damp squib flu–the rage bubble will burst big style.

    Their fabulous 4 day created NHS hospital for 4000 has 20 patients I understand.

  16. That first quoted paragraph is unreadable, truly awful writing.

    Has anyone ever sen him demonstrate where in the economy this excess money will go, and which specific taxes will absorb it? VAT, for example, would be useless if most of it piled into higher house prices (which of course is where most of it would end up).

    If the taxes are higher NI or income tax, why bother in the first place, as people won’t even get to spend it. Consumption taxes won’t stop it being spent on bigger mortgages. A mortgage tax, perhaps?

  17. would not have the currency that they would need to pay the tax that is owing in that same currency.

    He does not understand that this is an issue *created* by government diktat?

    It the government using violence to force people to use the currency it creates.

    There is no obstacle to a government accepting taxes in other currencies or in goods or services.

    But, again, he gets cause-and-effect backwards. The government isn’t creating money, buying goods and services, and then taxing it back. They are providing a service, taxes are fees for those services, and then they are using tax money to pay for the things they need to provide those services.

    His whole concept of what tax is and how it works is so garbage that every conclusion he comes to based on it is so far from reality that it can’t even see wrong from where its at.

  18. @ Agammamon
    Indeed!
    HMG not only can but axtually does accept works of art in part- or full payment of Inheritance Tax.

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