Don’t forget that Austerity is a political choice.

GrannyGravy13

Rather verifies my earlier post, there is a genuine lack of awareness of how the Government (any) Government runs it’s finances.

It isn't just that most people are maybe less aware than some of the arguments over the semantics of economic theories.

Most people are not interested in far-left economic theories or far-right economic theories. What they are interested in is a quick way of knowing what is proposed and how it will affect us. Those who want to know these theories in depth can listen to the proponents or discuss as happens on here.

However, telling people they have taken lies on board is, at the very least, rude. Instead of attacking or supporting a policy/theory it is a personal attack and quite unnecessary.

In the end it has been shown, in the clearest way possible, that the markets like what we might call "balanced books". They will allow for a well explained "unbalancing" and figures to show just how it will grow the economy (in either a left or right way) but they will judge our currency and our ability to stand by our "promise to pay" by what we do away from the accepted norm.

MaizieD

GrannyGravy13

Rather verifies my earlier post, there is a genuine lack of awareness of how the Government (any) Government runs it’s finances.

The research paper I linked to earlier shows how the technical, accounting, side works. Where the money comes from and how it is passed round the system.

What is done with the finances, though, is usually a result of political choices. And an awareness of how markets and individuals are going to react.

I have a rough understanding, and I do try but honestly some of these research papers go straight over my head.

Thank you for posting them, every day is a school day on GN

GrannyGravy13

Rather verifies my earlier post, there is a genuine lack of awareness of how the Government (any) Government runs it’s finances.

The research paper I linked to earlier shows how the technical, accounting, side works. Where the money comes from and how it is passed round the system.

What is done with the finances, though, is usually a result of political choices. And an awareness of how markets and individuals are going to react.

Who is this "one man"?

The one man is Richard Murphy, growstuff.

Which is weird, because I don't see his name on the research paper I quoted from, or the BoE bulletin articles I've suggested people look at.

Rather verifies my earlier post, there is a genuine lack of awareness of how the Government (any) Government runs it’s finances.

The mortgage interest plus capital repayments come out of annual income. The interest due on govt borrowings should also come out of annual receipts.

But it doesn't come out of annual receipts, does it Dinahmo. Government just creates the money to pay what it owes when it is in deficit, as it has been for decades, or even, 100s of years...

No, Dinahmo, a personal mortgage or even a small business' borrowing is nothing like the government's borrowing.

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)

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.

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.

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.

?

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.

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 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.

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/

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

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.

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

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.

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.

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.

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.

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 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

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.