The Financial Times has reported that EU officials are urging governments to prevent member states from offering support to households and businesses in response to the latest energy shock stemming from the US/ Israeli assault on Iran. The concern, it is said, is that excessive intervention might trigger a “fiscal crisis”.
That claim needs to be challenged. It is wrong in theory, dangerous in practice, and revealing in intent.
First, the idea that governments face a binding fiscal constraint in a crisis is simply untrue. Modern Monetary Theory (MMT) explains what should by now be obvious: governments that issue their own currency cannot run out of money. Their real constraint is inflation, not an arbitrary financial limit. The EU’s persistent claim that there is “limited fiscal room for manoeuvre” is not an economic fact. It is a political choice.
This is only true of governments which issue their own fiat currency. The EU states do not, being in the euro. Thus…..
Indeed it is. And inflation has made everyone in Europe substantially poorer.
“Oblivious” is a useful word when disparaging ol’ turnip-top. Being oblivious to the existence of the euro is one of his finest feats. We’ll learn next that he thinks the North American colonies still use the Pound Sterling.
The ‘weak’ form of MMT (governments that print fiat currency can print more) is widely accepted, so the only reason that the Rev Potato bores on about it must be to give the slowest and most gullible members of his congregation the illusion that they are learning something profound.
The inference that he draws (“so let’s get printing”) would be contradicted immediately if he ever looked out of the window and observed the inflation that he himself says is the real constraint…
We left the EU, so who cares what they say?
I fear that although we might have separated, the divorce is still looking shaky.
Their real constraint is inflation
He urges them not to be constrained. Print away your problems. Maharishi Murphy says all will be fine.
Don’t worry, Ed Miliband says windfarms are the cheapest way to generate electricity and we’ll all get rich through “green jobs”, so look at all those new factories with full order books opening up across Western Europe.
Ely’s own Terry Fuckwitt. “He’s got shit for brains”.
Greece is going to have a field day and Germany and France will once again have to bear the burden.
What is mathematically certain is that there’s a finite amount of reality, and if someone spends some of it on one thing then it doesn’t get to be spent on something else. Accountancy seems to be the idea of free lunches just by moving numbers around on a spreadsheet. That is so obviously poppycock, that it shouldn’t even need saying… yet here we are pretending this isn’t just stealing the public’s resources for someone’s idea of what is best for them.
“This is only true of governments which issue their own fiat currency. The EU states do not, being in the euro. Thus…..”
What you’re forgetting is that in Spudworld the ECB would just print cash and hand it out to any Euro nation that wanted it…..
Looking at you, Liz Truss