Yes, I am aware of the different monetary theories and that there are other ways but this is the way that goverments do it - they treat the economy as books that have to be balanced.
There are indeed 'other theories' but the one that is correct, and is backed by the work of several disciplines, such as archaeology, historical study, and anthropology as well as empirical economic analysis (I emphasise empirical because a great deal of economic theory is based on assumptions which have very little, or nothing at all, to do with reality), is that a state's money is issued by its sovereign authority. There can be no taxation unless the state has issued money into the economy.
Which makes everything that most people understand about how the national economy works a complete myth.
Yes, we have to live with that myth but there is nothing to say that it is an immutable system that has to exist in perpetuity. We can back, even vote for people who challenge that myth (because it is a political myth) and make an effort to understand what is wrong with the myth.
The capitalist system in which we live depends on consumers (that's everyone who buys anything, both individuals, institutions and the state)) for profits and growth. the prime reason for lack of growth in our economy is the fact that a very significant number of consumers are becoming more and more impoverished or are only able to afford the basic necessities of life. This doesn't just affect the poor but is extending upwards into the previously 'comfortable' middle classes (as Gary Stevenson has spent a great deal of tome pointing out over the past few years)
Companies will not invest in creating new businesses, or enlarging current businesses if they don't see any prospect of increasing their profits by doing so I do not understand why so many people, including our government ministers, the Treasury and the Bank of England, cannot recognise this very elementary point.
Reeves has it all in reverse. She thinks that the UK needs more investment from the private sector in order to grow the economy. Why should that sector bother if it has no prospect of increasing its business and profits?
In the 1930s depression the US President, Rooseveldt, injected state money into the economy to spend on projects which would provide employment and maintain the private sector. The US economy grew far better under this regime than did other economies affected by the Depression. Post WW2 the UK government spent. Growth was good (an the inequality gap narrowed considerably) Government spending to lift an economy out of depression was advocated by Keynes, one of the foremost 20th C economists. He was correct. It worked.
We have a costly ageing popualtion, around a quarter of the working age population not working and around 30% of children living in poverty.
And the answer to this is that the government should be spending. Money the government spends into the economy creates growth. It pays consumers' wages, it supports private enterprise because the government sources everything it needs from the private sector, and because it supports the private sector it allows them to increase their production and to create more jobs.
It should also be doing much more by regulation and taxation, to stop the wealthy sucking up much of the money the state spends.
The government can spend what it needs to spend because it is the government that creates the money needed not the 'taxpayer'
How would critics address all this?
Obviously the government should spend and grow the economy thus making it more attractive for private sector investment.
I suspect that all Reeves' budget will do is make the UK poorer; push more people into poverty, destroy more businesses and keep the public sector crumbling.
No other party (apart, perhaps from the Greens) would do any better because they all believe the same myths and economic fantasies.
