Don’t forget that Austerity is a political choice.

Whitewavemark2

Yes, if you think about government expenditure and subsequent debt, it is never raised from tax revenue. Look at the payment for war, or the pandemic or any other large expenditure.

The government raises it from bonds it issues with the promise to repay at a future date.

We finally finished paying for WW11 just before the end of the last century I think. Over the years inflation ensures that the debt becomes less of a burden, just the same as mortgage debt.

So all the nonsense about our children having to pay off these huge debts are just that - nonsense. Yes the debt stretches into the future, but that is exactly how governments work.

Oh dear.

DaisyAnne

growstuff

DaisyAnne* It's no skin off my nose what you choose to discuss. It's not a question of belief. It is a fact that the UK government creates the money which circulates in the economy. It's like discussing whether grass is green.

But Maizie was not saying that the "UK government creates the money which circulates in the economy". Nor was anyone disagreeing with that. No one disagreed with her at all.

What was said was,"It's accepted because most people believe in the 'taxation funds spending' lie." Maizie isn't banging her head against a brick wall. She is throwing others against it because they don't conform to her belief and the mantra that "tax doesn't fund spending". That don't conform because they don't believe it to be true. No amount of calling them liars or believers in lies will make them do that.

People are entitled to their own opinions but not to their own facts. This is not an accepted fact - yet. It may become that. However, if Maizie keeps up the evangelism, then that is a belief and the way we are assaulted with other opinions being lies, puts it in the faith category.

So just ignore the my post of 13.11 which shows explicitly that taxation doesn't fund government spending? That the spending comes first.

Austerity doesn't work

Zoejory

Austerity doesn't work

?

If we were serious about growing the economy we should give money to poor people who would spend it in their local area, supporting local businesses who in turn could become more profitable and pay more taxes.

Poor people do not but villas in Spain or luxury yachts built in Greece or stash their money away in Swiss bank accounts,

Poor people, who are often the working people who we relied on during the pandemic , actually invest in this country .

MaizieD

DaisyAnne

growstuff

DaisyAnne* It's no skin off my nose what you choose to discuss. It's not a question of belief. It is a fact that the UK government creates the money which circulates in the economy. It's like discussing whether grass is green.

But Maizie was not saying that the "UK government creates the money which circulates in the economy". Nor was anyone disagreeing with that. No one disagreed with her at all.

What was said was,"It's accepted because most people believe in the 'taxation funds spending' lie." Maizie isn't banging her head against a brick wall. She is throwing others against it because they don't conform to her belief and the mantra that "tax doesn't fund spending". That don't conform because they don't believe it to be true. No amount of calling them liars or believers in lies will make them do that.

People are entitled to their own opinions but not to their own facts. This is not an accepted fact - yet. It may become that. However, if Maizie keeps up the evangelism, then that is a belief and the way we are assaulted with other opinions being lies, puts it in the faith category.

So just ignore the my post of 13.11 which shows explicitly that taxation doesn't fund government spending? That the spending comes first.

Thank you. I hadn't noticed it I'm afraid - busy afternoon. You keep your beliefs in that description Maizie. I am only asking that you allow others to keep their definition if they chose to do so without constant attacks on their intelligence.

^ I am only asking that you allow others to keep their definition if they chose to do so without constant attacks on their intelligence.^

I think that people who ignore the evidence are doing a grand job; they don't need any help from me.

“The Party told you to reject the evidence of your eyes and ears. It was their final, most essential command.”

George Orwell 1984

There is never any point in trying to discuss with extremists, is there? I listened to Steve Baker still defending his economic beliefs yesterday. He has learned nothing. I'm sorry to say it, but your insistence that your view is right and everyone else's wrong sounds like the mirror image of his conversation.

No "Party" has told me what to accept; my eyes and ears are open. I am just not a convert. What you say is what every evangelist says about those they consider "lost souls". My economic soul is fine. You neither need to worry about it nor insult mine or anyone else's intelligence.

The quote would be funny if we stop to think about how you have turned one man's opinion into a belief you insist everyone must see as a "truth". But it isn't funny; it's very, very sad.

I was listening to the UN Rapporteur this morning, criticising the U.K. government and its choice to give tax cuts to the wealthy and companies, and the stated intention to inflict cuts on those in poverty.

He said that it is a political choice and does not have to be this way.

It will be a human rights disaster for millions of families in the U.K.

Austerity is a choice

Unfortunately at a rough guess the majority of the electorate view the Countries Economy as they do a household or a business.

This is perpetuated by politicians, political journalists and political commentators /experts. We are always hearing that the Country has to repay its debt, how much it is borrowing along with balancing the books.

Until how the U.K. funds spending, why we have taxes etc is discussed on prime time politics shows this will continue.

I didn’t study economics and my point reference has been balancing household and business accounts.

Whitewavemark2

I was listening to the UN Rapporteur this morning, criticising the U.K. government and its choice to give tax cuts to the wealthy and companies, and the stated intention to inflict cuts on those in poverty.

He said that it is a political choice and does not have to be this way.

It will be a human rights disaster for millions of families in the U.K.

Austerity is a choice

It certainly is. Having Hunt in the Treasury is and should be frightening.

Hunt doesn’t have a background in economics.
I can’t decide whether that’s going to be a help or a hindrance! Treasury mandarins will tie him in knots.
So ‘more of the same’ I suppose.
High taxes. Cuts to services.

The quote would be funny if we stop to think about how you have turned one man's opinion into a belief you insist everyone must see as a "truth". But it isn't funny; it's very, very sad.

Pathetic, DaisyAnne just pathetic.

Urmstongran

Hunt doesn’t have a background in economics.
I can’t decide whether that’s going to be a help or a hindrance! Treasury mandarins will tie him in knots.
So ‘more of the same’ I suppose.
High taxes. Cuts to services.

I assume you're aware that Hunt himself has appointed four new advisers to the Treasury. They are cut from the cloth Hunt has chosen.

At the risk of being put in the naughty step may I say that in my opinion Mr.Hunt has an appropriate surname with a change of one consonant.

I think this present Government has turned me into a sweary mary

MaizieD

^The quote would be funny if we stop to think about how you have turned one man's opinion into a belief you insist everyone must see as a "truth". But it isn't funny; it's very, very sad.^

Pathetic, DaisyAnne just pathetic.

Who is this "one man"?

The mechanism of money creation is not a belief - it's how it works.

Unlike a household or business, the UK government is not constrained by having an existing "pot of money" or generous overdraft facility. It can, quite literally, create money at the press of a few buttons. Nobody is claiming that it can continue doing that ad infinitum. Eventually, the money supply will need to be reined in and controlled, but there is absolutely no reason why anybody in the UK should be worried sick about housing, food and heating.

A wise government would create money and direct it towards where it's needed to benefit the maximum number of people.

Naughty, naughty GrannyGravy! Have you been listening to Krishnan Guru-Murthy?

GrannyGravy13

At the risk of being put in the naughty step may I say that in my opinion Mr.Hunt has an appropriate surname with a change of one consonant.

I think this present Government has turned me into a ^sweary mary^

There is a video you should see GrannyGravy13. Life is now beginning to mimic drama.

www.thepoke.co.uk/2022/10/20/krishnan-guru-murthys-nsfw-steve-baker-fail-just-edged-him-closer-hero/

I did see the clip of Krishnan Guru-Murthy last night, and I admit to laughing out loud.

Nearly as much as the opening of ITV 10pm news where the news reader said Effing (not F***ing) at least three times in his opening address.

growstuff

MaizieD

The quote would be funny if we stop to think about how you have turned one man's opinion into a belief you insist everyone must see as a "truth". But it isn't funny; it's very, very sad.

Pathetic, DaisyAnne just pathetic.

Who is this "one man"?

The mechanism of money creation is not a belief - it's how it works.

Unlike a household or business, the UK government is not constrained by having an existing "pot of money" or generous overdraft facility. It can, quite literally, create money at the press of a few buttons. Nobody is claiming that it can continue doing that ad infinitum. Eventually, the money supply will need to be reined in and controlled, but there is absolutely no reason why anybody in the UK should be worried sick about housing, food and heating.

A wise government would create money and direct it towards where it's needed to benefit the maximum number of people.

You seem to have got hold of the wrong end of the stick growstuff [Thu 20-Oct-22 11:43:19]. You have explained what you believe to be true. All I am asking is that Maizie stops being so rude to others (and upsetting herself) over what is a matter of semantics.

What does the oft quoted "taxes don't fund spending" even mean? To those enthralled by MMT, it means convincing people that governments do not have to spend within the constraints of direct taxation. There is some truth in that. Keynes would have agreed as he said, “Anything we can actually do, we can afford”. I like Keynes and his theory, but it is a theory, not a definition. Similarly, MMT is a theory.

But ... direct taxation is a way of bringing government money currently held by people or businesses back into the government pool from which government spending comes. Symbolically, therefore it is not unreasonable for people to say, "my taxes pay for my services". Even if that is not as exact as you would be in a thesis or dissertation, it makes sense to the people saying it. It is not wrong though it may be incomplete. Keynesian economists would say "Taxes, spending and monetary stimulus fund spending" but who is going to bother with that unless they are deeply interested in economics?

In the end, it comes back to a far-left wish to convince people that we can spend all we want on services and we will be fine. That's great. Good luck with it. There is some truth in it. Like all theories it is always incomplete until you know what you want to fund, what that will do to the markets, how it encourages growth, etc. You would think we might have learned that recently.

None of this provides a reason for the arrogant, hubristic comments to other posters. All I am asking is for a little politeness to those who do not share yours and Maizie's views. They too have a right to their opinion and what you are saying is not a fact or certainly not a complete one.

I haven't forgotten - and never will - along with the shock of Thatcher talking about the economy as if it were a household budget! It's not an opinion, or view, but plain fact that the economy needs investment, not belt tightening, to thrive.

Hetty58

I haven't forgotten - and never will - along with the shock of Thatcher talking about the economy as if it were a household budget! It's not an opinion, or view, but plain fact that the economy needs investment, not belt tightening, to thrive.

?

Hetty58

I haven't forgotten - and never will - along with the shock of Thatcher talking about the economy as if it were a household budget! It's not an opinion, or view, but plain fact that the economy needs investment, not belt tightening, to thrive.

Nobody is saying the economy doesn't need investment Hetty, unless I have missed something.

What makes you think anyone feels we don't need investment? That seems to be something all shades from far-right, through centrist, to far-left agree, although they have different ways they want to do it and different areas they want to invest in.

GrannyGravy13

Unfortunately at a rough guess the majority of the electorate view the Countries Economy as they do a household or a business.

This is perpetuated by politicians, political journalists and political commentators /experts. We are always hearing that the Country has to repay its debt, how much it is borrowing along with balancing the books.

Until how the U.K. funds spending, why we have taxes etc is discussed on prime time politics shows this will continue.

I didn’t study economics and my point reference has been balancing household and business accounts.

I hope that the following isn't too simplistic.

Unfortunately the majority of the electorate do not take their mortgages into account when talking about balancing their books.

One could equate a mortgage used to purchase a property with govt borrowing for long term projects. Mortgages exist for a defined period, as do govt bonds.

The mortgage interest plus capital repayments come out of annual income. The interest due on govt borrowings should also come out of annual receipts. At the end of the defined period the govt will buy back/repay the loans.

The above also applies to businesses who will borrow money from their banks to buy equipment or fund their expansion. The repayments will be made over a much shorter period that those for a mortgage or govt borrowings. The principle however, is the same.

Thanks Dinahmo

I have a rough idea of how the Government operates financially, but there are millions of folks who have absolutely no idea, that was the point I was trying to make in my post (obviously not very well)