His argument is straightforward. Hargreaves apparently paid £210 million in tax last year. He says that if only a handful of people like him leave the UK, the resulting tax loss might run to £1 billion a year.
Second, as both Hargewaves and the FT appear not to know (which is worrying in both cases), the government’s capacity to spend is not constrained by its ability to raise tax. The household analogy on which this argument relies is just bunkum, but both subscribe to it, or this story would not have been published.
But MMT says the same thing.
The govt is constrained by the appearance of inflation. At which point is must reduce spending or increase taxation – run a budget surplus in order to destroy the excess money causing inflation. If the rich folk leave the country and so cannot be taxed that means that other people must be taxed in order to reduce that excess money supply.
We get to exactly the same place, no?
I’m not seeing how a household paying its debts by acquiring many credir cards and loans then juggling the payments would be different to a nation employing MMT and bonds to achieve the same delay of the inevitable reckoning
Because money is just a token there is the difference in that the Government can increase the amount of money to a limited sense before they need to tax it back to avoid crippling inflation . The fundamental similarity is that if consumption rises above production then something is going to break.
if consumption rises above production then something is going to break
Eventually. “There is a great deal of ruin in a nation.” As we, and many of our continental neighbours, are hell-bent on finding out.
I suspect consumption has exceeded production in the UK. Indeed. Ruin. The end point of that one is subsistence farming. Where you get to if money loses value. So radical reduction in population. Who’s volunteering? Or who’s volunteering who?
This household analogy he spouts crap about is bollockios too.
I want the government to be successful at what they do.
The successful households I see run severely imbalanced budgets, overdrawing to study and then house buy, saving massively in their later working years, then overspending in retirement. There might be one year in the middle phase where income and exes balance.
Ergo, the argument that you don’t run a govt budget like a household is an argument that you *should* run a broadly balanced budget each year.
The lifecycle of a State or a Government doesn’t have the same time-scale as a natural person. The day of reckoning is either the next election, or maybe a problem for another generation or two.
Who the fuck is Hargewaves?
Anyway
This requires the reader (or writer) to believe that there is no downside to the British government, which ‘creates the currency’, creating enough currency to give ‘teachers, nurses’ and everyone else.whatever they think they’re worth.
Why not £75k pa to newly-qualified teachers and nurses? Why not £150k? Fuck it why not £1 million pa?
The only thing stopping the politicians doing this is presumably their own sheer nastiness, and while I yield to no-one in my distrust of the fuckers, and their nastiness, I know one thing – they know a vote winner when they see one.
If the government doesn’t need the money of the rich then why is it so insistent on taxing them so harshly?
It’s always about the lefty green eyed monster when it comes to the rich. That’s why arguing that VAT on school fees could be a negative when it came to govt coffers was never going to win the argument, for example.
unless those rich people just take their money with them when they go, presumably that would have the same effect by reducing the money supply, so the extra taxation not needed ? Would be a win-win for Murphy surely ?