Ragging on Ritchie

Snippa snipped

I was aware I was being controversial yesterday when I suggested that the Office for National Statistics was lying about the scale of UK national debt in its bulletin on public sector finances, issued yesterday. I was also aware that I was being provocative. But in the sense that I was suggesting that the ONS were stating something other than the truth – as evidenced by the UK Whole of Government Accounts – I was entirely happy with the claim. After all, if the audited accounts for our government show debt to be other than the ONS claim it to be,

A snip from an earlier post of Snippa’s. From the whole of government accounts:

Apparently Northern Rock didn’t go bust then

Richard Murphy says:
August 22 2020 at 8:41 am
When did NS&I last repay all deposits, simultaneously?

If the answer is never, indeeed, if you cannot even find periods when they fell massively except by policy, then they may technically be a liability but repayment is not an issue

So, yet more nonsense

Holding deposits is not a matter to be concerned about

If it was, declare all banks at major risk now

But you know they’re not

But that, of course, is because their liabilities are guaranteed by banks: the one organisation that can never fail to meet its liabilities, which is why no one need claim on it and why NS&I will nit be making net repayments.

Also, a very good point:

Kim says:
August 21 2020 at 6:44 pm
If you don’t consider BoE as part of the UK state, the so-called state “debt” is £2,000bn.

If you do consider BoE as part of the UK state, the so-called state “debt” is £2,000bn, including £745bn of reserve balances issued by BoE.

You can’t consolidate BoE’s assets with HM Treasury and at the same time not consolidate its liabilities.

Doesn’t Spud keep telling us that government debt is just the money we use? Therefore the money we use is government debt?

Lordy Be

In fact, what PWC is doing is to say that these other stakeholders do matter. They are not delaying their accounts because they could not estimate their provisions right now. Very obviously, they could. What they are instead saying is that in many ways these estimates of bonus and profit payouts are more important than the profit figure itself, because they will impact real lives. In other words, although they are not saying it, and the press report does not state the fact, what PWC is doing is to say that stakeholders matter, and it is taking time to get stakeholder reporting right. That, it is saying, is enough to justify a delay.

I welcome this delay then. It is a small step in the right direction in accounting, to a world where stakeholders matter.

People who get profits aren’t stakeholders, they’re capitalists.


A question for the nul-professore

The reason why it’s a lie is, in the first instance, that the government cannot owe itself money, and yet £735 billion of the so-called national debt is now owned by the government, and so cannot be included in the figure for debt.

When one is out of step with the world a certain puzzling over who is out of step, the world or you, might be useful. Have you done this yet?

And then there’s the fact that almost £200 billion of this supposed debt is actually deposits at National Savings and Investments, and to call that debt is grossly misleading.

And another question. Are deposits at banks borrowings by banks?

We’ve a system to do this

In this video I explain what accounting I think we now need to enable this transition to be a better way of working out how to allocate the capital we have within society to those who really can use it best if all our long term interests are to be served

Called the price system in a market. Can’t be bothered to watch the video to the reveal point where he disagrees.

Mebbe so

To progress we need a revolution. MMT will be at its core because it, alone, is saying another form of democratic politics is possible

And there are some of us out here who rather like the old economics of government. Because tellin’ ’em they can only spend what they can screw out of us does at least put some limit on how much of our lives they try to bugger up.

You know, actual democracy, revealed preferences? We’re only willing to have as much government as we’ll pay for?

MMT is the solution to A Level marking problems

Young people, whatever their aspirations, and those who work in universities, businesses and other institutions who need to rely on exam grades to help them achieve their ambitions have all been failed by a body politic that has shown insufficient ability to rise to the challenge that coronavirus has created.

And yes, the alternative is MMT

He also runs through a list of why all politicians are ignorant bastards and then says we should give politicians more power.



But what he actually fails to note is that MMT says that a currency issuer cannot have debt denominated in the currency it issues because that is a tautological impossibility.

Yer wha’?

It does?

But as MMT notes, this policy is deliverable with interest rate control using QE and the regulation of rates on central bank reserves which in combination can guarantee zero effective interest rates in near perpetuity. Low interest rates are fundamental to a strong economy.

Someone should go tell Ergodan. He’s been printing money, keeping interest rates low, the lira just fell 40% and generally everyone thinks there’s going to be the most almighty crash…..

Idiot is idiot

Again, this ignores the fact that shale is destroying itself. Not only are renewables cheaper now, but shale delivery is over shorter time spans than forecast, fundamentally undermining is economics. It isn’t taking Biden to undermine shale: it’s simply not viable.

That, the rapidly falling cost of renewables and the possibility of funding the transition at net zero interest cost

If renewables are cheaper then no funding of the transition is necessary. It’s something that will happen naturally as people install the cheaper option.

And, of course, if renewables are in fact now cheaper then we’ve already solved climate change, haven’t we?

Well, yes, OK then

What the A level fiasco has proven is that we have a government that has two fundamental qualities. The first is that it can both create and then exacerbate crises. And the second, is that it is utterly clueless as to what to do about them.

This coming from the man who insists that government should have more power over our lives. And no, he never has identified a system or practice of government that does better. He’s simply incapable of understanding that the reasoning in favour of markets is not their theoretical beauty but their advantage over government by the sort of fuckwits who get to succeed in politics.

Good Lord, tax research has some useful information on it

Of course, it’s in the comments, not the blog. And of course Spud doesn’t grasp it either:

Trevor says:
August 12 2020 at 12:40 pm
Yes the methods are meant to be similar but the methods around government output really are not similar. As government output is not sold on the market nearly all countries simply measure government output and hence government contribution to gdp as input = output. ONS has for the last decade or more not been doing this. Instead they use direct measures of output in certain areas of government including education. Looking at number of children educated, exam results etc. In the good times these does not impact international comparability as both input=output and direct measures give broadly the same results. However if in a pandemic you close all the schools, keep all the teachers employed then the direct measures are going to fall off a cliff whilst input=output does not change.

So where other countries have simply said the the inputs (wages of teachers primarily) have remained constant and therefore there is no decrease in output. ONS have based their numbers on surveys of reported hours worked by teachers and number of children actually attending school.

Despite the best efforts of teachers and schools it is clearly the case that the level and quality of education and therefore education output has dropped over the past months. ONS are to the best of knowledge the only national statistics institute to have attempted to record this in their figures. A 30% decrease in education output. A reward to all those parents who have struggled with homeschooling is that the ONS correctly say (based on current rules) that homeschooling is household production and therefore outside the production boundary. That time and effort is not in gdp.

Here is the ONS article concerning it all.


There is a fascinating story to write about this. To see almost the entire academic economic profession and all economics journalists completely fail to spot it is an inditement of them all. And only further confirms that the profession has no idea about the data they use.

Richard Murphy says:
August 12 2020 at 1:41 pm
And, politely, that’s been a poor measure then

Or, alternatively, a good one

It either shows that the government did not react appropriately to keep public services going

Or it utterly fails to reflect the considerable effort made by many to ensure that they were – which I have witnessed, in education for example


If only these people could count

Howard Reed says:
August 11 2020 at 11:00 am
Warning: these are ambitious:

1) Complete reversal of all real-term cuts to public spending and in particular social security since 2010

2010 is of course a bad date, that’s bottom of the recession. Since 2007? Spending is up, so what cuts?

Why doesn’t the stupid bastard read the goddam research?

From Richard Murphy:

Second, to claim that we are dependent on growth as he defines it is simply wrong. The financially engineered, fossil fuel driven growth of modern capitalism is what is driving us to extinction and there is not a shred of evidence that it can continue into the future and be reconciled with continuing human life on earth.

Third, if he wants to talk growth then it is growth of the state sector that he should have been promoting, but did not. We do need more care, education, social housing, sustainable transport infrastructure and so on. But we do not need more long haul holidays, heavy weight cars, monoculture farming, junk fashion and much else, all designed to fuel the inexorable demand for an interest return to banking.

And fourth, talking green and about growth in the way he does is simply impossible: carbon and temperature targets (let alone those required to secure biodiversity) cannot be reconciled with the sort of GDP growth his report envisioned. We can do more for each other, without a doubt, but only in a radically transformed society and it’s the height of in difference to the fate of humanity to pretend otherwise.

From the actual science on the subject:

RCP 2.6 is the one where everything is kept below 2 oC and where everything is fine. The perceptive will note that GDP is *higher* in this scenario than in more emittively polluting ones.

Why doesn’t the damn fathead ever, I mean ever, bother to check the source materials? Why do we always get these confident predictions entirely at loggerheads with the actual science he professes to be backing up?

Crippled JC on a pogo stick it only takes two minutes to look up the emissions models and their associated GDP levels after all.

To suggest a modest course of action

A good start would be to make your lies plausible matey.

A certain untruth

Stuart Adamson says:
August 6 2020 at 8:28 pm
I remember one prediction you made..

“deaths of more than 10,000 a day are likely in little more than a week”

That was off the mark

Richard Murphy says:
August 6 2020 at 8:39 pm
Lockdown then happened

Unemployment need not be as high as I forecast if action is taken

Context matters

Hmm, well:

As he says, what is notable about the first chart is that everyone else is succeeding in curtailing covid-19 now. We are not.

If the UK current trajectory continues – and as we run out of medical facilities that is a reasonable assumption for the next week or more – then deaths of more than 10,000 a day are likely in little more than a week if the rate of growth seen yesterday continues.

OK, that was on April 2.

Except, UK lockdown started on March 16, went into overdrive March 23. His prediction was 10 days after lockdown, not before.

Does he just think that no one will check these claims?

Economic heuristics

I think it fair to say that whatever we once thought we knew about economics, we no longer know. Saying so, I am not talking that much about economics theory, which few have ever comprehended, and whose relationship with reality has been so remote for so long that this might be a blessing. I am instead talking about the economic heuristics that govern what most people think about the way that the economy works.

No. The two things everyone needs to know, the base heuristics of the subject, are:

1) Incentives matter

2) There are always opportunity costs.

These haven’t changed and they’re not going to either. Not that Spud acknowledges either of them but then that’s what explains his misunderstanding of the subject under discussion.


First, this was in the ‘Wild West’ days of 2005 when tax campaigning was in its very early days and adverse publicity for tax planning was unknown. It’s important to remember how much has changed since then, largely due to that campaigning and the resulting publicity.

Second, tax justice was never rewarded by HMRC for its work on this. The question as to why that did not happen is relevant.

What’s the argument here? That Tax Justice Network – or whoever – should be given some cash for their work? Get the HMRC Gold Star for their lapels?


I’m the expert and I dunno

I’ve written two books on tax havens, and the honest answer is that tax havens come in so many varieties that it is very hard to define what one is.

That leaving Snippa to argue that his roses failing are the result of tax havens. Because if we can’t define it it’s everything, innit?