Not wholly and exactly, no professor

ISA savings do not threaten the viability of banks and building societies.

Nor do people saving with the government by buying its bonds threaten the government’s financial viability.

But we call people saving with the government ‘borrowing’,

What government is doing there is borrowing. Just as it is indeed true that eh savers are saving. We also say that the banks are borrowing from the savers. That’s why a savings account is a liability to a bank, why a loan outstanding to a borrower is an asset to a bank.

Because there are two sides to any such transaction and whether it’s an asset or a liability depends upon which side of the line we’re describing.

And people do tend to get a touch tetchy if they can’t regain their savings, even though they are just the bank/the government borrowing. As those lines outside Northern Rock showed.

8 thoughts on “Not wholly and exactly, no professor”

  1. Hilarious typo from Spud…

    “Donald Scott says:

    If GERS provides inaccurate figures, which figures do you believe are more accurate and why?

    Richard Murphy says:

    I’ve stated this moany times”

  2. Dennis, Tiresome Denizen of Central Ohio

    ISA savings do not threaten the viability of banks and building societies. Nor do people saving with the government by buying its bonds threaten the government’s financial viability. But we call people saving with the government ‘borrowing’,

    Does anyone else ever get the sense that Richard Murphy channels Hugh Laurie’s Prince George when he is writing posts at taxresearch.uk?

  3. One might almost think that amongst the legion subjects about which the Great Potato knows absolutely Sweet FA is double-entry bookkeeping – you know every debit needs a corresponding credit. Which would be extraordinary for a Chartered Accountant and Economist*.

    *Self-identified

  4. The spud has obviously never seen the vast market in distressed sovereign debt, trading below par because of missed payments including the redemption of principal.

  5. Dennis, or maybe Bertie Wooster. Thus hitting three touchstones of stupidity, fecklessness and sloth.

  6. Important insight from Ritchie: Lending billions to the Argentine government does not threaten its financial viability.

    Once again he’s not even wrong.

  7. Steady on Greenie, old boy. Bertram Wilberforce was well-meaning, moderately selfless and usually had a reasonably accurate apprehension of the limitations of his own intellect and understanding.

Leave a Reply

Your email address will not be published. Required fields are marked *