So, for the record, let me make it clear that Sunak has no unexpected bonus. Instead what we have is a shortfall of cash in the economy. More money has been destroyed than was expected. That must mean there is less money in the economy than was anticipated. And, given that the economy is already under economic pressure from a cost of living crisis what that means is that the consequence of this overpayment of tax is not good news, but is instead bad news. If £30 billion of extra tax has been paid that is money not available for other use when keeping the economy solvent with readily available cash to fund spending is vital.
According to commentators, Jeremy Hunt is not going to be spending his ‘windfall’. It will instead be used to reduce the national debt. That is one of Sunak’s stated five goals if you recall his announcement of his five big objectives in January. So this money will not be replaced, which it could be by increasing government spending on decent pay rises for those who need them, for example.
If commentators really understood money (and they don’t) they would appreciate that this is not the moment to reduce the amount of government money in the economy. In fact, it is the moment when more is needed.
It’s hilarious, isn’t it?
It’s not even MMT. Which says that print the money and spend it, take it back out by taxation in order to reduce the resultant inflation. We’ve got 10% inflation now. So, the Solanum is insisting we should have even more money around.
He can’t even grasp the implications of the very policy he claims to be a Guru of.
It’s really not hard to work out unless you do not wish to understand it, of course. And that is the real problem that we face. Wilful ignorance is the last bastion that is supporting neoliberal economic thinking. But at least that means that one day things must change.