Goodness - golden boy Sunak now less popular than Starmer!

Urmstongran

I just wasn’t sure how it worked volver. I love my proposals.
If a politician took the time and effort to explain all this to the voters (thank you MaizieD) we’d probably not have snorted along with the MSM at Corbyn’s money tree. We might even have voted for him.....

The Tories don't want to spend the money. They want a small state - more money to be made by their friends.

I saw quite a lot on tv about Corbyn's spending proposals and generally thought they were OK. Unfortuately I think he went too far when he talked about free broadband for everyone.

lalta

why is it suspicious shes from a very prominent rich family in india and rishis still doing a great job compared to some i think its jealousy and its been leaked out to get people talking

Please explain why you think Sunak's doing a good job? There's not many (on here at any rate) who agree with you.

why is it suspicious shes from a very prominent rich family in india and rishis still doing a great job compared to some i think its jealousy and its been leaked out to get people talking

Urmstongran

I just wasn’t sure how it worked volver. I love my proposals.
If a politician took the time and effort to explain all this to the voters (thank you MaizieD) we’d probably not have snorted along with the MSM at Corbyn’s money tree. We might even have voted for him.....

That's why Labour is so frustratingly cautious about their economic plans. They are always stymied by the 'How are you going to pay for it? question and their very ill deserved reputation for financial incompetence. Ferociously pushed by the tories and predominantly right wing media, of course.

Poor old Red Ed had just the same problem as Corbyn as far as his economic policies were concerned.

Why haven’t Chancellors of the Exchequer (different stripes over the years) debunked what she said then and explained it all to us?

Because Chancellors of the Exchequer are not economists for a start.

They are 'guided' by the professional economists and, until relatively recently, although the economists must know that the state issues new money on a regular basis, because it happens every year, many of them still haven't worked out the implications of this freedom. Most of them don't go back to the root of 'where does it come from? ' They just observe and study what happens when it's 'here'. They'll pay lip service to the fact that a national budget is in no way like a household budget, but then treat it as though it is. Weird...

I just wasn’t sure how it worked volver. I love my proposals.
If a politician took the time and effort to explain all this to the voters (thank you MaizieD) we’d probably not have snorted along with the MSM at Corbyn’s money tree. We might even have voted for him.....

Sorry I've just read this and can't think of any reasons why we wouldn't want to do the things that Urmstongran has listed...

If we can just print money and ‘spend, spend, spend’ then why aren’t we all living in the lap of luxury? Increase the state pensions! Build 100 new hospitals! Let doctors train up at no personal cost! Open nursery schools that are fee-free so mums can return to work if they wish and keep all their wages! Heck - give everyone a ‘holiday voucher’ to spend as they wish every year.

It might sound a bit la la to you, Ug, but there's no reason why we shouldn't. It would benefit the economy and it would benefit most of the citizens of the nation. All those jobs, all that money to spend on suppliers, on local businesses, on construction, on anything you care to mention.

The constraining factor is inflation if there is nothing, or very little, to spend the money on. Taxing some of the money back would help to control that, also being careful about how much money is issued.

Is there any shortage of things to spend money on in the UK?

Of course, governments can take a different path, like ours did with the pandemic money. They can push all money in the direction of their friends and donors, leaving little for the rest of the population. That's the kind of thing that happened in Zimbabwe & Venezuela. Most people call it corruption. We don't seem to be quite so fussy in the UK...

I still can’t get over that Rishi Sunak is married to a woman who is allegedly richer than HM the Queen.

Thank you, MaizieD. My son studies economics at Uni but if I ask him he blinds me with science and I am a bear with very little brain!

icanhandthemback

I was born blind when it comes to economics, MaizieD so I could have totally the wrong end of the stick but doesn't the issuing of more money contribute to inflation and a lessening of our credit rating? Please educate me. If you can manage it you'll have managed what several economics lecturers failed to do. Economics scuppered any chance of me becoming a Chartered Accountant!

Inflation either occurs because of price rises of commodities which are beyond a nation's control, such as the oil price rises instituted by OPEC in the 1970s, or by there being not enough resources to spend the available money on. 'Resources' could be anything, consumer goods, construction, more hospitals, schools, hairdressers... anything that money buys.

Excessive money in the economy can be controlled by 'cancelling' some by taxing it back, or by being cautious about issuing it... (no doubt there are other mechanisms, too)

But when you look around the UK there is so much in the economy that we could do with more money, and political will, that inflation caused by too much money chasing limited resources isn't really a worry, is it?

TBH. a lot of the more abstruse, technical economics stuff goes over my head, too. But MMT starts with a simple basic fact and any thinking person should be able to build on that.

I think that economics is a bit like education. Neither can be totally explained by scientific means because at their heart they are not dealing with rational actors which have predictable behaviours..

Credit ratings are weird things, because money is essentially a sort of confidence trick. It only works because people universally accept the principles behind it. Just think, our currency is worthless in other countries, you have to convert it to their currencies before you can use it.

I feel as though we’re all sitting up straight now in class waiting for our tutor to come into the room. Pencils at the ready.
?

If we can just print money and ‘spend, spend, spend’ then why aren’t we all living in the lap of luxury? Increase the state pensions! Build 100 new hospitals! Let doctors train up at no personal cost! Open nursery schools that are fee-free so mums can return to work if they wish and keep all their wages! Heck - give everyone a ‘holiday voucher’ to spend as they wish every year.

It all seems a bit la-la to me?

Margaret Thatcher promoted the idea of us as a country ‘living within our means’. It’s certainly taken root.

Why haven’t Chancellors of the Exchequer (different stripes over the years) debunked what she said then and explained it all to us?

Also, why are some sovereign countries run like banana republics printing too much money so citizens need a suitcase of it to buy a loaf of bread?

Lots of questions, sorry MaizieD!
I can’t get my head around economics within a country.

I was born blind when it comes to economics, MaizieD so I could have totally the wrong end of the stick but doesn't the issuing of more money contribute to inflation and a lessening of our credit rating? Please educate me. If you can manage it you'll have managed what several economics lecturers failed to do. Economics scuppered any chance of me becoming a Chartered Accountant!

ajswan

Pantglas2

It’ll be the same people who didn’t have a good word to say about him even when they were grabbing all that furlough money.

I have friends who bought their council houses and still hate Thatcher for depleting social housing stock!

Hooray someone with a good memory and some sense. Some idiot freelancers have soon forgotten the billions given in furlough money and money to help businesses survive. If this was another country they would not have received anything and been left to go under. I notice that a huge number of people working from home were not in a hurry to get back to the workplace. The owner of Pimlico Plumbers ordered all his staff back to the workplace or they would be sacked.
Absolutely right about Margaret Thatcher, (my hero). How many people bought their council houses with a massive discount and then sold them for a massive profit after the number of years had lapsed before they could sell them. Margaret Thatcher, the milk snatcher, what a load of bxxxxxxs, she was actually outvoted on this issue.

Somehow I don't think that the employees of Pimlico Plumbers could work from home. Unblocking a loo by remote control perhaps? I think that he was referring to mask wearing - anyone who didn't want to would be sacked.

The self employed who received SEISS grants are now paying income tax and Class 4 NIC on those grants (from 2020/21) unless their total taxable income is less than the PA and below the lower level for Class 4 (lower than the PA)

I love that analogy growstuff

Ooops. Pressed "send" to early.

The prices of properties, houses and hotel stayed the same, but we could all afford more of them.

When I played Monopoly with my children and it looked as though somebody was going to run out of money before we wanted to end the game, the banker (me) would hand out some more money to all the players in equal amounts, so the game could continue. I never asked for it back.

vegansrock

I do realise that the economy is not like a household budget, but politicians do use the analogy to justify austerity/ raising taxation etc. This fact does not excuse ignoring fraudulence in the furlough scheme or government cronyism.

Why do you repeat their lies, then?

It's not that complicated if you can recognise the very basic fact that the supply of money in the economy of a country that issues its own currency is controlled by the government of the country. They are the ones who can issue more money to ensure that there is always enough in the economy. People might scoffingly call it 'the magic money tree', but whatever it's called it is issued by the government.

This is what most economists fail to acknowledge. They study what happens if x,y,z conditions are in place; how prices and wages behave; how the money markets behave etc. etc. but they never seem to look at how 'money' comes into existence. It's just 'there' with no explanation of why it's 'there' or how it got 'there'. MMT starts with an explanation of how money comes into existence and takes it from there.

It's what happens after it's issued that gets more complicated. And what happens after it's issued is a political choice. Our government, via the BoE, 'created' £billions to cover pandemic spending. Their political choice was to offer their friends and donors the opportunity to make vast profits from the issued money. For example, Test & Trace could have been done differently using Local Authority expertise and knowledge and giving the LAs the funds to execute it. But extra state funding of LAs is contrary to tory ideology. So they went down a different route.

For me, the issue of 'taxpayer's money' is a difficult one, because, technically, most of us who spend any money at all are 'taxpayers', but the phrase is so deeply associated with Thatcher 's completely false assertion that the only money that the 'state' has comes from the taxpayer (the 'income tax payer' at that) that I think that calling it 'public money' is a better way of looking at it. The'public' as a whole make up 'the state' and money issued by the state is issued for the public benefit. It is 'our' money. So we need to vote for people who we think will use our money wisely for the benefit of all citizens without having to worry about book balancing and 'how are we going to pay for it'. The state can always pay for it...

Obviously it's much more complex than this simple outline, but if we can keep hold of the notion that anything is possible because we can afford 'anything' I think we can make much better choices about how public money is spent. and call out the lies about things like 'need to pay it back'.

I do realise that the economy is not like a household budget, but politicians do use the analogy to justify austerity/ raising taxation etc. This fact does not excuse ignoring fraudulence in the furlough scheme or government cronyism.

I admit I do not really understand economics at government, business or stock market level.

I did manage my work budget but that never even got to £1m, so tiny fry!

I do understand that some small countries choose to make economic decisions that benefit society across the board and others that make the choice to benefit one section of society more than another.
I know which approach I prefer.

I find the understanding of economic theory very hard - even though it was part - a minor part - of my degree.

But I do understand that Thatcher's idea that a state economy is just like a household budget is inaccurate and confusing - it is confusing enough already!

I wish he was being criticised for being a rubbish economist rather than the personal stuff.

To be fair, he is being rubbished by economists and commentators with logical minds who can clearly see the connection between cutting people's incomes and a shrinking economy. It's just that they aren't the ones being published in the right wing media or being interviewed on the BBC.

But as most of the population is in thrall to the 'household economy' b*ll*cks and have no time for experts I don't suppose it would be as effective as the personal attacks.

vegansrock

Sunak did not pay furlough money out of his own pocket, we paid for it and will be paying it back for years , plus billions was claimed fraudulently by business owners and not being pursued. So stop pretending Sunak is some sort of philanthropist.

The furlough money was newly created money, it wasn't 'borrowed' from anyone, it doesn't have to be paid back, we will NOT be paying it back for years. It would be good though if those who obtained it fraudulently had to pay it back.

I have tried over the years to explain just how our money is created by the state and how it gets into the economy. It is a coherent, logical and true (even the Bank of England supports it)

I would, though, be very happy to consider any logical and coherent explanation that challenges this explanation. I would be particularly interested in an explanation of why the furlough money has to be 'paid back' and who it has to be paid back too.

In the meantime, because no-one ever answers my 'who are we to pay it back to'? question I continue to be frustrated by the ability of seemingly intelligent fellow citizens to be conned by the myth that a national economy is like a household economy and willingly accept economically illiterate nonsense about tax, state spending and 'borrowing' even from a government they dislike.