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1/ The economy is like a household budget and you have to cut your cloth accordingly is probably the greatest lie ever told.
For the past 9 months the Gov't has magicked money into existence using a process called Quantitative Easing (QE).
For the past 9 months the Gov't has magicked money into existence using a process called Quantitative Easing (QE).
2/ QE means they magic the money by adding some numbers to the bank of England computer who pays it to the Treasury but they leave behind a clever sort of IOU that they'll never pay back - because the IOU is to ourselves.
3/ I owe me some money that I might pay myself back one day if I feel like it. Sounds stupid, right?
Except we won't ever pay it back. We never have. QE is effectively costless and completely sustainable, especially if everyone else is doing it (and they are).
Except we won't ever pay it back. We never have. QE is effectively costless and completely sustainable, especially if everyone else is doing it (and they are).
4/ In fact, paying it back deletes money from existence and no-one ever wants to do that.
I'll say it again. Every £1 paid back deletes that £1 from existence.
Which future politician is going to kill billions of pounds?
I'll say it again. Every £1 paid back deletes that £1 from existence.
Which future politician is going to kill billions of pounds?
5/ And don't worry, QE isn't like a bond or gilt auction we're we actually loan money from foreign states or pension funds or private banks or whatever and agree on a repayment package from future taxation either.
Your pension is fine when we QE.
Your pension is fine when we QE.
6/ No, we create money out of thin air. The only reason we put an IOU in place is to add it to the other debt mentioned above but we don't have to do that. We do it because it creates a compelling argument to 'cut up the credit cards' and implement austerity.
7/ And austerity is a con. At best it is a mechanism to transfer huge amounts of wealth from the state into private hands and at worst it is a bean-counter's sadomasochistic fantasy.
Remember last time? It didn't work. The debt just got bigger.
Remember last time? It didn't work. The debt just got bigger.
8/ No struggling restaurant has ever recovered by sacking the chefs, axing its marketing budget, canceling promotions, buying inferior ingredients, canceling the redecoration, and raising the prices. No, they do the opposite if they want to recover.
9/ Has Rushi Sunak ever even watched Ramsay's Kitchen Nightmares?
Spending a few quid on some new furniture, training the cooks, putting in some new EPOS system, and getting some better ingredients is literally what happens every week.
Spending a few quid on some new furniture, training the cooks, putting in some new EPOS system, and getting some better ingredients is literally what happens every week.
10/ Cutting our way to growth is economic nonsense.
And almost every economist agrees.
Well, except the batshit crazy, disaster, Warlord capitalist ones.
And almost every economist agrees.
Well, except the batshit crazy, disaster, Warlord capitalist ones.
11/ And there is never any mention by the "economics experts" on TV of the disastrous negative multiplier effect that freezing public sector pay and spending will have on effective demand and the rest of the economy either.
Just the same old 'maxed-out credit card' line.
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Just the same old 'maxed-out credit card' line.
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