I'm posting this as a separate thread so it doesn't get lost in one of the NHS threads we already have running.
I almost called it 'Look, I'm not an economic nutter' 
I think it's relevant not only to current demands for increased public sector pay, but also to how we fund the NHS.
Anne Pettifor, economist, says clearly that 'Taxes Don't Fund Spending' (so growstuff & I haven't plucked this idea out of thin air, economists are saying it, which is why we say it)
She explains in this post, which is worth reading in full:
annpettifor.substack.com/p/to-pay-for-nurses-wage-rises-raise?utm_source=substack&utm_medium=email
This quote reiterates what I have said time and time again
(state spending).... if invested in people and infrastructure (like hospitals, railways or universities) spending will generate income in the form of tax revenues for the government. This is because the individuals, households and firms that are beneficiaries of that spending, pay taxes on their income, profits and capital gains - via PAYE and other means of tax collection.
Importantly, they only pay taxes after they have earned income - at the end of the week, month or year.
Once earned, individuals, households and firms spend and invest their new, higher income. They spend on goods, on rent, on food, and on services provided by for example, football clubs, lawyers, accountants, musicians, artists etc. That spending generates additional tax revenues for government, this time paid by football clubs, firms, shops, landlords, farmers, lawyers, musicians etc.
And these taxpayers don’t just pay once; they continue paying taxes for months and even years after receiving a pay rise or government contract.
In other words, tax revenues are multiplied for government by its investment or spending on higher incomes and infrastructure.
*There is no need to raise taxes to fund spending*.
Here she explains how what is being said by politicians, the media and some economic institutions is wrong.
Let us begin the rebuttal with the BBC’s lunchtime news on 13 December - listened to by millions.
Ben Zaranko of the IFS was invited on and declared that to offer higher pay to nurses (something he agreed was necessary to retain essential workers) government:
“would have to provide more funding and that might require them to raise taxes.”
This trope “we can only afford to raise nurse’s pay if we make everyone else pay with higher taxes” is repeated endlessly by microeconomists of the IFS, by BBC journalists (with honourable exceptions) and by politicians.
Ever since 2010, we at PRIME have tried to explain that IFS staff consistently peer at the British economy through the wrong end of a telescope, distorting their analysis. In other words, they view the government’s budget in much the same way as a household might assess the impact of income and expenditure on a family’s budget.
But the government’s budget cannot be judged through a micro-economic lens.
^ The government does not raise finance from taxes ^ (I can't get this to format properly 
)
She disagrees with MMT economists that the government doesn't need to 'borrow' to spend, but that's a minor point here. They both say essentially the same thing , that taxation doesn't fund spending.
This gives us a whole new perspective on how to view the UK's economy and how to judge proposed spending plans.
The question to ask is 'How will this benefit our citizens and the national economy', not, 'How are you going to pay for it?'
I hope you can see its relevance to the question of NHS funding and claims that we don't have to make a financial contribution to fund it. There may be excellent psychological or social reasons for asking for an upfront financial contribution through 'insurance', but it's not strictly necessary.
P.S. 'microeconomics' looks at the economic behaviour of a single company or institution, 'macroeconomics' looks at the economic behaviour of, sectors, or a whole country or globally..
ronib
growstuff
Financial servicing of day to day running costs is paid for by taxes.
No, it isn't!Light bulb moment.. of course you are a follower of Modern Money Theory ! You have just reminded me of how very annoying it is to study economics!
You're still being obscure, ronib
Have you studied economics?
Hetty58
It's nothing new. I remember the shock of Thatcher comparing the economy to a household budget. Love or hate her (I hated) she certainly wasn't dim - so couldn't possibly have believed it. She must have known the logic behind Keynesian economics,
Incredibly, still, decades later, the same old lies are trotted out - and many do believe, even now, that 'belt tightening' is the answer (especially if it's other people doing it).
That's the whole point Hetty. It's fine for other people to tighten their belts and/or blame others for being feckless. 
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