Hmm, well, yes

Now, everywhere I go I encounter a recrudescence of the fallacy of applying “household economics” to the nation at large. Who is going to pay for this spending, people ask.

Well, the answer is: the government, by borrowing at next-to-zero interest rates, and the economic growth that will revive the government’s coffers in due course, just as it did after the second world war.

I think a substantial case can be made that the government defaulted on most of that debt through inflation. Something they can’t do again because they’ve done it to us once.

It would actually be useful if someone could point to a detailed discussion of this. How much of that post WWII debt mountain was in fact massaged down by inflation and inflation alone?

8 thoughts on “Hmm, well, yes”

  1. Surely that shouldn’t be too difficult. Value all the repayments in constant 1945 pounds, add them together and deduct the sum from the original debt.

  2. allthegoodnamesaretaken

    Now, everywhere I go I encounter a recrudescence of the fallacy of applying “government ” to the question at large. Who is going to pay for this spending, people ask.
    Well, the answer is: the taxpayer.

  3. ” Who is going to pay for this spending, people ask.
    Well, the answer is: the taxpayer.”

    More accurately, other people, somewhere at some time. If you say taxpayers, many people will think that ‘business’ pays tax, when as we all (should) know, ultimately only people pay taxes, not legal fictions.

  4. “What taxpayer?” is increasingly the question. Esp after Great Paid Holiday ends and Dole q blossoms.

    Funny money seems to be all they have left. Dominic Frisby asked the BOE what they used to buy the 1.473 billion of govt debt they purchased last Tuesday.

    Maybe the day is not far of when Blojob and Spewknack* will magic up 1473 billion in a single afternoon.

    *
    “Have I the honour of addressing Mr Blojob or Mr Spewknack?”

    “Mr Spewknack died 7 years ago this very night. A bale of his money fell on him at the printing works”

    “I am sure his stupidity is well represented by his surviving partner”.

  5. . . . the government defaulted on most of that debt through inflation. Something they can’t do again because they’ve done it to us once.

    I thought the pattern was if a house is burgled it’s more likely to be burgled again.

  6. ‘ Who is going to pay for this spending, people ask.’

    Some of us don’t ask because we know – us.

    We are going to pay because of the loss in buying power of our wages, savings, investments, pensions because of a debauched currency and inflation, increased taxation to finance the borrowing.

  7. Bloke in North Dorset

    “Now, everywhere I go I encounter a recrudescence of the fallacy of applying “government ” to the question at large. Who is going to pay for this spending, people ask.
    Well, the answer is: the taxpayer.”

    Even Mrs BiND has woken up to the issue of government borrowing and asked me who pays. My answer was our hoped for grand children and great grand children. Probably a couple more generations the way they’re going with lockdowns.

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