’m probably wrong but since abandoning the gold standard, doesn’t our (and most other countries’ (I think) rely on debt as part of the economy? Furthermore, I’d suggest that national debt is a narrative that suits the Conservative party, and justifies their own spending policies.
You are 100% correct.
National debt is just the countries savings account. A positive spend into the economy - with matched bond issuance. The money to purchase bonds came from previous government spending.
It's all a charade designed to use against us with terms like debt/bonds. It's all under the control of the government/BoE if they choose the decisions to take control of the situation.
I feel Austerity this time will be the final nail in the coffin for the Tories. And is entirely the wrong thing to do.
Is that it strikes me that some of the countries with the lowest national debt to GDP also have war and turmoil in their recent past or have questionable human rights records where they literally spend nothing on their population. It also shows the countries where the gap between the haves and have nots is the widest
Absolutely - the government spends less then there is less £ sloshing around.
Financial establishment carries out the exact opposite of what is needed for society to flourish. It's designed currently to concentrate wealth. Let's not be suprised at the Tory pathway.
Did someone forget to charge his batteries?
Quality media training there - did anyone expect anything else?
Did someone forget to charge his batteries?
It does look like his brain is far too occupied with thinking "Oh ****, this is bad, very bad! I thought Boris was meant to win and take the flak! What the hell do I do now?!?"
So what?
I don't really know, as I said, I'm happy for someone to explain to me if/how that's not actually a big deal, as we're told that it is.
**EDIT** - sorry, I see we crossed posts on your later explanation.
frankconway Full Member
No doubt you will comment further as you (appear to) have a pathological need to have the last word; see posts and threads passim.
Posted 33 minutes ago
Oh thank you for the completely uncalled for personal insult, it's what every thread needs.
A positive spend into the economy – with matched bond issuance.
So (and again, these are genuine Qs), to take an extreme example, what's to stop a government just issuing an infinite amount of bonds, and being to pay for everything, and we all live at home on massive state incomes with free hoverboards for all?
I don’t really know, as I said, I’m happy for someone to explain to me if/how that’s not actually a big deal, as we’re told that it is.
**EDIT** – sorry, I see we crossed posts on your later explanation.
Yeah sorry don't mean to be snipey.
The real take is that government spending is technically not limited by spending in itself and can't run out of cash. The absolute metric is too much inflation (money with not enough resources to spend on.) But not the current type of inflation which is a whole bag of different.
There can't be more GDP unless there is some form of government spending driving the private money anyway. Private money can't simply just grow without government spending.
So someone somewhere in the midst of time decided debt/GDP was a useful metric when it's used mainly as a barrier to government spending. It is not an appropriate metric of spending. Inflation is.
Rishi Sunak's speaking style makes Liz Truss look relaxed and fluid.
FFS, so f--- what? I think, if we should have learned anything over the past few years, is that we should more interested in our politicians' competence, and less in their charisma.
**EDIT** - I make no judgment yet on his competence, BTW, I just don't give a shit what his speaking style is like, and neither should anyone else.
One thing that strikes me about this is that it’s not how much is spent, but rather how it is spent.
Yup, it always boils down to priorities. Gordon Brown's priorities he would claim were investment, Liz Truss would claim that her's were tax cuts for the wealthy.
You decide which is likely to lead to more growth.
So (and again, these are genuine Qs), to take an extreme example, what’s to stop a government just issuing an infinite amount of bonds, and being to pay for everything, and we all live at home on massive state incomes with free hoverboards for all?
Productive capacity.
You have to generate something in return for the money with your Labour and resources to grow the economy in a way that is beneficial to society - so you need a hospital? Then build it. The money is there.
That's where the politics gets in the way. It takes someone to step and say we are going to do this.
I will take a hover board though.
One thing that strikes me about this is that it’s not how much is spent, but rather how it is spent.
Absolutely - but you always see politicians claiming we don't have the money though. Most days on most media outlets.
It's a both a simple and complex lie / misappropriation. It needs taking apart and challenging constantly.
IHN, that's what I keep asking, if it was possible without consequence there would be another country out there laughing themselves silly. Whilst I get the countries finances don't equate to household finances I still can't see how we can borrow indefinitely without something going horribly wrong. I think Liz Truss may have just proved that with her increase spending / reduce taxes approach that then caused my mortgage payments to go up.
A positive spend into the economy – with matched bond issuance.
So borrowing to fund spending.
So borrowing to fund spending.
I think borrowing to fund investment is more accurate (although I guess the argument is then about what classes as an investment)
FFS, so f— what? I think, if we should have learned anything over the past few years, is that we should more interested in our politicians’ competence, and less in their charisma.
I agree with those sentiments but to be fair when I saw it live I felt as if he was talking deliberately slowly because he thought he was talking to either a small child or a complete idiot. I was a bit taken aback.
It is not a particularly good way for a prime minister to communicate his message to voters.
Still, he's a Tory so it suits me fine.
So borrowing to fund spending.
No no no! You don't need to borrow what you are the sole issuer of!
The spending takes place first and is not dependent on bond issuance.
They do this control liquidity/intrest rates. It's a choice that the government could choose not to do.
There's a plethora of great podcasts here covering most topics discussed here. Scroll down to find your topic!
#149 is an excellent breakdown of the recent budget.
Sunak:
But there is no doubt we face a profound economic challenge
Has he forgotten that he was Chancellor from 13 February 2020 – 5 July 2022 ???
He does have the education to understand and respect institutions like BofE, OBR etc - so we shouldn't get a repeat of last month's debacle. It's more of the same, though; low tax, low growth, low investment, low skills, low wages...
Where's the vision for the country and leadership of people?
How about some honesty on the choices we face / have made e.g. Brexit/Ukraine/Inflation
It won't be long before this situation re-appears.
Has he forgotten that he was Chancellor from 13 February 2020 – 5 July 2022 ???
And pretty much immediately inherited a global pandemic, closely followed by a war in Europe that's sent energy prices up the hoo-hah, so it would be slightly unfair to blame him for the current situation. One of the reasons he quit was because he couldn't get 'Let the good times roll' Johnson to grasp, or at least be honest with the public about, the financial shitstorm that was coming.
I'd like to add it's funny he didn't get in last month (and we could have avoided that nasty blackspot). My hunch; this was due to Tory members being prejudiced about backing a 'darkie'. LMAO
Has he forgotten that he was Chancellor from 13 February 2020 – 5 July 2022 ???
Collective amnesia seems to be a common trait.
The last muppet completely forgot that she’d been in the cabinet for the previous ten years
In all honesty, though I utterly despise the Tory party, I’m relieved that someone is finally in charge who isn’t absolutely barking mad
It’s a sign of how far we’ve sunk as a country when this is now the benchmark
It does look like his brain is far too occupied with thinking “Oh ****, this is bad, very bad! I thought Boris was meant to win and take the flak! What the hell do I do now?!?”
An expression perfected over the years that started with Johnson and Gove looking very worried in July 2016 when Leave won and they had to work out what the actual **** that meant.
Repeated many times over the years when asked minor questions like "what does Brexit mean?"
Symbolic of the absolute cluelessness of these charlatans.
Sunak should be fine but whether his technical ability will keep Tories in power in the next GE will be tested very soon. If he can pull this off then Tories will have hope.
The first non-white PM in Uk history is certainly a thing to be lauded but a Tory millionaire non white! Do the two cancel each other out?
Ah there’s only one colour that the tory party worry about - the colour of money.
I'm just hoping for small wins like the removal of Mogg and Coffey and their pet projects and personal biases.
He will create Austerity 2.0 and tell you it isn't.
He will cut services by freezing budgets and pay.
He will introduce lots of stealth tax and not mention it.
He will not cut tax but will freeze allowances
He will quietly remove the contents of your wallet and tell you its all for your benefit.
He seems like a nice polite young man. And he's always smartly turned out, with his shoes polished and hair brushed. Not like some of 'em nowadays. Eeh I always say a nice polite young man should be smartly turned out. You can tell a lot about a nicely turned out polite young man by his shoes, I always say.
No no no! You don’t need to borrow what you are the sole issuer of!
So far as I can follow it @rone, MMT stresses that a person (even a central bank or government) cannot borrow back an iou that it issued (which is of course true, you cannot owe money to yourself). So issuing government debt = cancelling government iou's (the ones implicit in the money used to buy the debt with), paying the debt back = issuing fresh government iou's. Buying back bonds amounts to issuing the buy-back iou's now rather than at the bonds' maturity dates. If you ignore the separate legal personality of the central bank as MMT folk do, this would cancel those bonds (see above). But I imagine the BoE regards its separate status as important, so it does not treat it like this and puts the bonds back on the market as second hand bonds, when it gets round to doing so. Likewise the government, so it treats the money it gets from issuing bonds as an asset rather than a reduction in liablity.
Likewise the government, so it treats the money it gets from issuing bonds as an asset rather than a reduction in liablity.
Just briefly the BoE gets around all these complex balancing sheet activities by have different arms of its operations to appear at arms length. (I will dig out a link.,)
That bit is complex and I can't pretend to understand it all.
A bond is simply a swap of an interest bearing asset for a non interest bearing asset. (Because the government can always cover its debts.)
Sorry not got much time but I'm glad people are engaging.
No no no! You don’t need to borrow what you are the sole issuer of!
Jesus you'd think people would get this by now. It's like govt finance myths bingo. 🙄
Can I please urge everyone with questions about how govt finances work to go and do some very simple and accessible reading, and then come back and make daft statements like 'we'll end up like Zimbabwe if we spend more' etc.
Places to start:
The Deficit Myth by Stephanie Skelton
https://twitter.com/RichardJMurphy?s=20&t=sdVc-EN7sWTkUm0f6WpRDw
https://twitter.com/D_Blanchflower?s=20&t=N-lx2FarYosT9Hk8cBkn0w
He seems like a nice polite young man. And he’s always smartly turned out, with his shoes polished and hair brushed. Not like some of ’em nowadays. Eeh I always say a nice polite young man should be smartly turned out. You can tell a lot about a nicely turned out polite young man by his shoes, I always say.
As much as I realised this is a bit Tonge in cheek, there is a part of me that feels a little bit relieved we now have less of a lying nutcase or mysteriously incapable dimwit in no 10.
My parents know the butcher in Bedale, apparently he is a very nice young man when he pops into their shop.
"an election would be nice but its not gonna happen as its basically political suicide for the torys and why would they want that?"
Because they are shameless cowards who have doubtless considered calling a GE early with the intention of leaving Labour to deal with the s*** storm?
The Tories could then mount a new challenge in 4 years time when the situation is looking a bit brighter and Labour have been through the ringer?
But you're probably right, thankfully.
Just briefly the BoE gets around all these complex balancing sheet activities by have different arms of its operations to appear at arms length. (I will dig out a link.,)
I am sure, but what about the Government (Treasury)? They no doubt keep accounts as well, and it is they who issue bonds. The Bank issues currency. The former has an account with the latter. That seems to keep things nice and separate from an accounting point of view. But I imagine that, even if they were the same legal person, they would still keep things separate accountancy-wise.
It was nice of him to spare a thought for Lizzie and thank her for the energy price cap.
Otherwise it would have cost him a fortune to heat that swimming pool
That's another example of him being a nice young man; he was polite and said thanks.
What more could anyone expect?
I'm sure he'll say sorry when he breaks something or makes a mistake.
Well, hopefully the NHS won't get blanked like Hancock...
The UK economy was on its knees after World War 2, the country was skint, no one talked about “very unpopular things”.
On the contrary, they talked about highly popular things such as creating free universal healthcare, a huge building programme for decent affordable housing, and a modern welfare state.**
Even though the country was skint.
Edit : ** And they achieved it.
Yep, it’s weird one,but I have a very good feeling that having joe public returning armed after fighting a war may not have ended well had they not thrown something at the plebs.
I just think the current gov are just incredibly stale and dull and devoid of any ‘vision’ other than what has been tried a million times before.
(Always reminds me of the Lloyds names who were used to cashing in year after year and were unpleasantly surprised the time they had to pay out,they’d forgot what they were actually doing with their money.)
Mmm NHS, wasn’t he spending a lot of time with the US insurance companies a while back discussing ‘opportunities’.
https://www.nytimes.com/2022/10/25/opinion/rishi-sunak-uk-prime-minister.html
That ^^ imo is the most brilliantly written critique of Rishi Sunak I have yet read, it hits every single nail on the head.
Having said that it is probably the only actual critique of Rishi Sunak that I have read, British newspapers seem only to have been interested in how well Sunak was fairing in the leadership election, rather than his politics and what a Sunak premiership might mean for the UK.
How ironic that it is an article in an American newspaper which digs deeper.
Normally I would quote one or two of the best points in a article but I genuinely find it impossible to chose any from that article as they are all excellent points.
Don't read it if you are someone who thinks that Sunak becoming PM is some sort of step forward and don't want to be disappointed by reality though.
FFS the link didn't work!
No idea what the problem is try googling the headline
The New York Times: Opinion | Rishi Sunak Won’t Save Britai https://www.nytimes.com/2022/10/25/opinion/rishi-sunak-uk-prime-minister.html
But I imagine that, even if they were the same legal person, they would still keep things separate accountancy-wise.
Reminds me of a story I was told by an exFD of one of Robert Maxwell's companies when he was a colleague of mine:
exFD - Robert, you've to keep your private businesses and your public businesses separate
RM - Oh, like pockets, a separate one for each?
exFD - Yes
And as RM walks away my colleague heard him say quietly - "separate pockets, same trousers..."
Well, hopefully the NHS won’t get blanked like Hancock…
That was very, very funny.
The New York Times: Opinion | Rishi Sunak Won’t Save Britain.
It's odd that more hasn't been made of the levelling down by the Conservative party over the last 3 years. The changes to the funding formulas for councils have shifted money away from deprived areas towards better off but historically 'underfunded' areas. What this means of course is that the deprived areas which have much lower council and business rate takes now also get less support from the treasury, while richer areas which have much better per capita tax takes, and lower costs of provisions for supporting their communities get more than they used to. Bonkers.
While there's a lot I don't like about Bozza, I do think he was the balance to Rishi's austerity and welfare cutting program, and I think we'll actually be worse off (as a country, overall) without Boris' influence. OMG I cannot believe I just said that but there you go. I did.
