You’re free to say “And don’t talk about inflation. That risk only exists if we overspend – and a pay rise for the NHS isn’t that. That also only happens if we have a non-functioning tax system to claim the spend back – and we have one. So, inflation is not a risk from this.”
Err:
Lesson two is to understand where tax fits into all this, which it does. It is true that making money without limit will result in inflation. Tax is the mechanism used to prevent inflation. It takes the money the government creates back out of the economy.
Odd how a pay rise for the NHS does in fact mean higher taxation, isn’t it? Even when we’re told it doesn’t.
So we give with one hand and take away with the other. And what happens to those who don’t get a 3% pay rise? Do they just get screwed, or maybe we could have a special nurses tax to reduce their spending?
It’s hard to believe someone so stupid has managed to live to the age he has without, I don’t know, cutting his head off while shaving with a chainsaw…
There’s just too many gems to list – but here’s a taste:
In the case of government it’s never true there’s no money to do what people want. The opposite is always true. There is always money to do what people want. The reality is that politicians have to decide which things they want, and the fact is that they do not want to admit that.
To reiterate: the government spends its own money. It does not spend money that taxpayers have given to it.
The process of government funding is that spend now always proceeds taxation. In a country like the UK, where the government creates its own currency, tax now never comes before spending. That is lesson three from this.
The government is always the safest place to deposit money. After all, it can always repay. It can always create the money required to make that repayment so that it can never fail, unlike every other savings institution in a country.
So, people save with the government. It rations the number who can do so. If it didn’t not no one might save with private banks. And it rations the value of savings it will accept by claiming that it still borrows to fund its spending. That’s just another lie it tells.
So, in summary, money creation funds government spending. Tax controls inflation. No government needs to borrow; it does so only to provide a safe place for savings. And QE keeps the pretence that the government must borrow intact whilst boosting the wealth of the wealthiest.
Bear in mind the person writing these excerpts is employed in the Higher education sector by multiple Institutions that have been accredited as Universities. The need for a huge cull of the people employed by that sector has seldom been more starkly illustrated.
What my dear old grandmother would have described as “nutty as a fruitcake”. Why she used to say that I haven’t a clue. She made excellent fruitcakes, but never put nuts in them. Said they played hell with her dentures.
bis
What I find a little sad is that this kind of nonsense would be naive for someone in their twenties. For someone in their sixties to be peddling this kind of ‘analysis’ is a bit embarrassing….
@ V_P
With Spud, many of the things he is an ‘expert’ in, he wasn’t even aware of a few years ago. Climate change, MMT, virology.
He finds something on a Monday, is an expert in it by Wednesday, on Thursday he invented it and on Friday he falls out with those who might have made a lifetime’s study of the subject, denouncing them as neoliberal trolls and becoming the one-true champion of the ‘real meaning’ of the subject.
AndrewC
You are forgetting of course that with him having been infected with COVID four times he is in high demand from the medical profession. Only a neoliberal troll would declare otherwise…
My Mum would have said “daft as a brush”.
Tax is the mechanism used to prevent inflation. It takes the money the government creates back out of the economy.
That is the funniest thing I’ve read in weeks.
Taxing to remove money the government has created to spend is exactly the same as taxing to spend the money, logically, right?
My Mum would have said “daft as a brush”.
Where I grew up that would have been aimed at someone who was a bit silly but a likeable character. It was almost a term of endearment. I’ll bet it was applied to Darren Gough on more than a few occasions.
It certainly wouldn’t apply to Spud.
I’m not sure what we’d have used for Spud but I’ll bet his nickname would quickly become something Punchbag, because some of his insults and mannerisms wouldn’t have been taken lightly.
Argh, buggered up the HTML tags 🙁
You’re right there, BiND. And on reflection I think my fruit cake epithet was unnecessarily mild. If Granny had actually met him I’ve no doubt she would have given him the rough edge of her tongue. And she could blister paint. She was reputed to have brought down a German bomber with one of her looks.
So I get a three percent pay raise – and then my taxes are increased by three percent – so I end up with the same amount of money.
But the costs of everything have increased by 1%(due to the increased costs of labor coming from that 3% pay rise)?
So now I’m worse off.
But if you don’t completely tax the extra income I got (to counter the increase in CPI due to inflation) then inflation continues indefinitely until we have to either pay for things with wheelbarrows of cash, change the currency, or re-write banking software to handle scientific notation.
The worst part of that list of yours is that he’s conflating *the UK government’s* stability and tradition of ‘rule-of-law’ with *all governments*.
But its patently clear to anyone who’s looked at the world that while the things he lists might be applicable to the UK government, they are by no means *physical laws*. Plenty of nations have not been able to repay debt, have failed.
So the UK’s ‘exemptions’ here are just because of the tenor of the UK’s *current* state and could change at any time – there’s nothing permanent about UK culture. There’s nothing except inertia and a few non-idiots standing in the way of the UK going Zimbabwe.
But he looks at the UK as it is now and makes broad pronouncements about economic laws based on those observations.