What Fun!

The implication is that boom times are coming and that growth is going to happen. That is Kwarteng’s approach to economic management. He wants to provide a stimulus by injecting more money into the consumer economy.

In contrast, the Bank of England is increasing interest rates. It did so yesterday. It will not be long before it does so again. The implication is that it thinks the economy is overheated and money must be extracted from it.

Only one of these approaches can be right.

Not so. It’s entirely possible that changing the incentives – the tax rates, what is taxed – can have an effect upon the microeconomy distinct from the stimulatory effect of the macro. Actually, we’d rather insist that this is true.

2 thoughts on “What Fun!”

  1. Maybe the goal is to take more money/wealth from those who’ve who’ve benefited from cheap money and take less from those who produce wealth?

  2. We’ve had years of stimulus (enormous amounts of money created). This didn’t really help.

    Now we need more, when we’re suffering the effects of all of the previous jabbing?

    Don’t think so.

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