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‘E is a one

On top of that, even when it knew that the current price increases were on the way it still planned the National Insurance increases and cut Universal Credit whilst encouraging the Bank of England to increase interest rates. It adopted all these measures because it claims that it is facing a debt crisis, with the national debt now needing to be repaid as a consequence of the costs of Covid.

These claims are entirely unjustified. The £400 billion cost of Covid was not paid for with either taxation or borrowing. Money was instead created for this purpose by the Bank of England through what is called the quantitative easing process, and there is absolutely no compulsion at all upon the government to repay this. That is because if this debt is due to anyone it is to the Bank of England, and that is owned by the government and so in turn by us, and I can hear no one clamouring to have that money paid back.

But MMT says that when inflation arises it must be cubed by taxing back the money creation that causes it.

All of which is most amusing. Even for Spud, have we ever had a basic policy insistence reverse ferreted quite this fast?

8 thoughts on “‘E is a one”

  1. Bloke in North Dorset

    The time between Spud having a grand theory of everything and it disappearing down the memory hole is getting shorter by the year.

  2. There are some dates that go down in economic history. April 1 this year might be one of them…It was also the day that National Insurance charges went up”

    Nearly right. It’s April 6th.

    Anyone paid between April 1st and 5th can only hope their payroll dept knows the rules better than Spud.

  3. The Meissen Bison

    …when inflation arises it must be cubed

    Yes, that does sound like Elynomics in action.

  4. Surprising that Boris has not offered him a post in his government. Afterall, his grasp of economics is about as good as everyone else in the cabinet.

  5. Did you mean “inflation… must be cubed”? In the current economic climate it’s entirely possible you did

  6. “The £400 billion cost of Covid was not paid for with either taxation or borrowing”
    In one sense he’s right – it’s paid for, and always paid for, by the toil of ordinary people. Eventually, and always. The sooner government stops simply helping itself to the fruits of that toil without regard to those who toil, the better.

    Of course, Spud doesn’t care about that, natch.

  7. He never focuses on the right thing. Sure, the debt is owed to the BOE and the BOE could just agree to not pay itself back.

    That doesn’t change the fact that inflation is caused by too many Pounds chasing too few goods.

    The solution to inflation is either make more stuff or remove some of that money.

    Which could be done by the BOE paying itself back’, this taking money out of circulation.

  8. Interesting Dialogue on one of Murphys threads

    Craig says:
    April 3 2022 at 5:25 pm
    You are closer to Putin than Johnson… you are an authoritarian who is intolerant to anyone holding an opinion which is different to yours.. you claim anyone who voted brexit to be racist and anyone voting Tory to be fascist. You would no platform nearly half of the population if you had your way…

    Richard Murphy says:
    April 3 2022 at 8:24 pm
    Usually I ignore drivel like this

    But when I ban people it’s not to silence them – I respect their right to an opinion. But equally I have a life, and do notneed to deal with nonsense (like this) here when it’s sole aim is to be destructive. Doing so is not oppression. I know, and respect your right to your own bloG. You do not need to be on mine then. And freedom is the right to say know, which I exercise Freedom is also the right to be represented , which I uphold

    But do I despair of the fascist, racist mindset that drive Brexit and the Tories? Yes, because I respect people and am baffled by those who can only hate

    Tell me, why do you hate people?

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