Wondrous reasoning, isn’t it?

The reality is nothing the Chancellor has done will do more than help people settle bills. I suggest that’s inadequate because it does nothing to tackle the cause of the problem, which is exploitation by energy companies, which is what is creating the already existing inflation.

What is more, since the cash to be provided only helps settle the excessive and exploitative demands that they have made, and does not in any case provide an excess of funds to then be spent on other goods, it is hard to see how this package is inherently inflationary in itself.

First, the debt leverage that would have gone onto private households is reduced, being replaced by government money creation, which is the right alternative.

Money creation has no effect on inflation, d’ye see?

7 thoughts on “Wondrous reasoning, isn’t it?”

  1. I do wonder if we need a new “Ragging on Rishi” section given the spudonomics of this latest wheeze

  2. I will say this for Murphy – more than anyone else he illustrates why this tax is such a bad idea. No doubt Bojo and Dishi thought ‘this’ll stop them Criticising me in the salons of North London’ but they can never r anything other than ‘evil Tories’ – until they realise that these people will always despise them there is no hope for them. I hope the Tories get destroyed at the next election but you do worry about whether any of your assets will remain once the Murphyite wing of the Greens have their hands on the levers of power…

  3. Van, I’m sorry, these people are in no way, shape or form ‘Tories’ in any meaningful definition or understanding of the word.
    And be honest, the Murphyite wing of the greens have had their hands on the levers of power for the last forty years.

  4. Murphy demonstrates his ignorance of one of the most elementary facts in economics – money is fungible (Tim: isn’t that implied in the definition of money?).
    So money given to be used to pay heating bills releases the money previously allocated to those bills to spend on something else, thereby fuelling inflation. The only cases where it does not are those households who were planning to default on £400 of their gas and electricity bills and gamble that their supplier wouldn’t take them to court because it would cost more than the supplier would get back.
    Oh, yeah! Exploitation by energy companies through going bust? I’m tempted to say “what planet is Murphy living on?” but if it wasn’t our Earth we shouldn’t need to worry.

  5. Once upon a time the bond market could be relied on to scotch the idiotic schemes of politicians. What happened?

  6. The BoE buys the bonds now. That’s why Spud loves MMT – reality doesn’t have to be a brake on political spending.

  7. Elsewhere, he’s calling for a new political consensus, *and* he’s saying what it should be.

    No, no, no, fuck off, no. You get to call for a new consensus, or you get to propose what one might be. You don’t get to do both, by definition.

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