Snippa’s predicting vastly higher taxation

No, of course it hasn’t. Government debt is effectively unchanged. What has increased is the central bank reserves in the economy. But they make good the shortfall in cash generation that would have otherwise occurred in the private sector. The Office for National Statistics is, yet again, issuing wholly bogus statistics. We might as well begin to call it the Office for Public Misinformation so frequently is it doing this now.

That’s interesting. I thought – ‘cuz Snippa tells me so – cash was government debt. Therefore an increase in cash is an increase in government debt.

Still, this is the fascinating part:

And the QE will not be unwound – because markets will never be able to or want to absorb £735 billion of extra gilts. And if they did, then new gilts should anyway be issued to fund a Green New Deal.

So, we’ve just increased the base or narrow money supply by however many hundreds of billions. We’re only ever going to use tax to reclaim that money from the economy. So, what do tax rates have to be to reduce the money supply to prevent the inflation if – or when – the velocity of money returns to something more normal?

6 thoughts on “Snippa’s predicting vastly higher taxation”

  1. Bloke in North Dorset

    “ The Office for National Statistics is, yet again, issuing wholly bogus statistics”

    The ONS takes its political impartiality and ethical and statistical standards very seriously. I wonder if Spud, the world renowned statistician, is going to get a call from their lawyers?

  2. FT Front page Wednesday

    I’m confused here: unemployment rising and will rise more when furlough/lockdown ends, Sunak concerned wages could soar in 2021. How can this be correct?

    Pensions triple lock at risk from Covid-19 fallout
    “Rishi Sunak is preparing to break the Conservative party’s “triple lock” state pension pledge, amid Treasury fears that the policy could soon become unaffordable because of the fallout from the coronavirus crisis.

    The UK chancellor’s willingness to break a 2019 Tory manifesto commitment is a sign of how the Covid-19 pandemic is forcing the government to confront political taboos.

    Mr Sunak has been warned that unless he breaks the pledge next year, the value of the state pension could rise sharply. The triple lock ensures the state pension goes up by whichever is higher — wages, inflation or 2.5 per cent.

    The Treasury has noted with alarm official forecasts that wages could soar in 2021 as they rebound from an artificial dip caused by the government’s job retention scheme…”

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