Liz! Truss!

Cheers.

What I mean is, sure, I understand the need for an opposition, to challenge the government incumbent as Ernie says.  (Not that I’m seeing a lot of challenging but hey ho.)  And yes, I understand that there’s a need for them to lay groundwork for an election, I said as much in my question.

What I don’t understand is how it’s in any way relevant to this conversation.  Someone says that a Tory / Truss policy is poor, someone else counters that Labour / Starmer’s suggestions are worse but… so what?  At best it’s irrelevant, and potentially it’s diverting attention away from the place where we should be directing the most scrutiny.  It’s interrupting debate because LOOK OVER THERE INSTEAD!

No?

giving the current state of polls

To be fair there has only been one poll since Truss became Prime Minister 2 days ago and although it gives Labour a very healthy 15 point lead she has barely got her feet under the table. Time will tell but I think she preformed better at prime minister’s question than expected. The two year price cap has taken me back but I still think that she will be significantly worse than Johnson, who was no less willing to throw money at a crises. We’ll see.

The monarch dying will give an absolutely massive boost to any ruling party imo – the nation and institutions will feel the need to rally together.

It’s ‘code’ for being lib dems. What bit of that don’t you understand?

Who are these lib dems you speak of?

Oh so now voters now have to check on STW to see what options Labour might consider in 6 months time? ffs 🙄

You asked a question, I gave an answer. Who said anything about the wider voting public?

Labour needs to come up with credible proposals to put to voters and potential supporters.

Yes, they do.

Nor am I particularly impressed by their fiscal prudence attack line

So are you advocating pumping public money into private companies indefinitely? Because as an immediate fix that works but longer term that’s not sustainable. It doesn’t take a genius to figure out that was what Rayner was getting at.

Time will tell but I think she preformed better at prime minister’s question than expected.

That’s only because she was expected to be absolutely dreadful.

Labour really need to ram home the fact that she wants the energy company to keep on making massive profits and for the “hard working families” to pay for it.

The developers round here (quadzilla) were trying for years to prove the safety and support for fracking with no luck. Every drill attempt led to an earthquake and they had a permanent protest outside which led to congestion problems on a daily basis.

No problem, we’re not allowed to protest now, remember?

It’s interrupting debate because LOOK OVER THERE INSTEAD!

Its not because an obvious part of the debate is what are the alternatives? You cant discuss the failings or otherwise of the PM without also discussing what is being proposed as an alternative and how sensible or not those arguments are.

So are you advocating pumping public money into private companies indefinitely?

No. I am suggesting that portraying the Tories as a spendthrift party and Labour as the party of fiscal prudence is a poor attack line, even if it’s true.

Of course I could be wrong and it might win voters over, but if that is the case I am not entirely certain what the point of a Labour government would be – fiscal prudence involves all sorts of things such as not pissing money on sick people or reducing child poverty. “Difficult decisions”.

No problem, we’re not allowed to protest now, remember?

Yeah, will be hard to campaign on all climate related issues now… the fossil fuel extractors will just get the police to keep you well away from the pointless new fracking site anyway… just a quick word with the new PM and Home Secretary they’ve bought themselves…

So are you advocating pumping public money into private companies indefinitely?

I’m not even against pumping public money into investing in energy production (I’d rather the government asked to own what they invest in really, but hey, I’m a dreamer)… but link it to weaning us off dependance on gas (and oil)… don’t link it to accelerating (Truss’ own description) how much we pull out of the ground in future… it’s madness.

So are you advocating pumping public money into private companies indefinitely

That’s not my line I think – but no one says indefinitely.

All public money ends up in the private sector eventually. Then back out via taxation.

No. I am suggesting that portraying the Tories as a spendthrift party and Labour as the party of fiscal prudence is a poor attack line, even if it’s true.

Mcdonnell and Corbyn used fiscal prudence under James Meadway’s budget plans for 2017/2019. It did them no good at all – newspapers just said it was unaffordable. It’s nothing new.

Its not because an obvious part of the debate is what are the alternatives? You cant discuss the failings or otherwise of the PM without also discussing what is being proposed as an alternative and how sensible or not those arguments are.

Good point.

All public money ends up in the private sector eventually. Then back out via taxation.

Unless it goes overseas by tax loopholes. Like Apple, Amazon, etc, etc.

fiscal prudence involves all sorts of things such as not pissing money on sick people or reducing child poverty

Just because you think a fair chunk of the money the government are going to be paying the energy companies for us should be clawed back in taxes on their profits, doesn’t mean you can’t also want to invest in the NHS and reducing child poverty. It’s an argument to make if you just like arguing on the internet, but it really makes no sense. Where you spend money, where you tax it back… this is a major role of any government, and should be the vocal concern of anyone who wants to be in government.

“Difficult decisions”.

It should be an easy decision to reduce (not remove) the amount of profit energy companies keep for themselves when they are getting it due to a combination of war in Europe and a large government spending plan that benefits them hugely today and tomorrow (and the rest of us in the short term).

Could someone explain to me, in simple terms preferably, how printing more money doesn’t add bugger up the economy? Also, if that’s the solution, is all the talk of having to borrow billions just nonsense? Also also, how come every country doesn’t do it?

Unless it goes overseas by tax loopholes. Like Apple, Amazon, etc, etc.

Oh yeah – the wealthy hoard money – and move it around. That’s the reason for new money creation in general to fill the the bit that gets syphoned off.

Lots of corporation money is commercial bank money that sits on balance sheets though.

Could someone explain to me, in simple terms preferably, how printing more money doesn’t add bugger up the economy?

Don’t, rone will be out to say you can print endless money and it will never need paying back or have any negatives….

You’ve missed the memo… the government are going to be buying energy for us… for now… so the fossil fuel company profits are coming from the government

Big companies encompasses more than just energy producers and suppliers. The people who spend the most money are the poorest in society (the rich and seriously rich hoard it) and they aren’t going to have the spare for the odd discretionary purchase.

ernielynch
Free Member

The monarch dying will give an absolutely massive boost to any ruling party imo – the nation and institutions will feel the need to rally together.

yeah, was just wondering about that myself. Guess it will.

Time will tell but I think she preformed better at prime minister’s question than expected.

That’s only because she was expected to be absolutely dreadful.

Some might have expected her to be absolutely dreadful but I didn’t necessarily. I know that she isn’t a skilled orator but she comes across as fairly genuine and quite ordinary.

It was her first day at the job, never done anything like that before, Starmer, who has played his part many times before, read questions to her and she answered ad hoc without any preparation, the little I saw on the news looked quite reasonable.

She will without a shadow of a doubt improve as it becomes a routine part of her job, all Tory and Labour leaders do. The prime ministers question which always sticks in my mind was Thatcher’s last one – by then she had completely mastered it and went out with all guns blazing. I hate to admit it but she was very good.

Could someone explain to me, in simple terms preferably, how printing more money doesn’t add bugger up the economy? Also, if that’s the solution, is all the talk of having to borrow billions just nonsense? Also also, how come every country doesn’t do it?

First of all distance yourself from printing money – it’s doing the rounds and is not accurate.

The government don’t just issue money to the public in general operations – that’s helicopter money.

Government spends new money into existence every time it buys or funds something. Since the 70s.
Resource/project is purchased / Labour employed with new money creation via the Treasury.

The spend is made etc – the Debt (DMO) office look at the difference between taxation revenue (it’s not used for the spend) – and if there’s more spend that taxation payments – Bonds are issued to match the difference. That’s your deficit. Key is the spend is made first. Bonds aren’t essential to spending but they help drain reserves to stop too much money flowing around. This forms the national debt which includeds NS&I, savings etc.

Now Q/E – idiots on the right-wing net then think Q/E is money printing. It’s not.

Q/E is new money creation to buy back bonds by the BOE.

So the BOE buy back bonds from the government. This is used to offset deficit spending – and is a complex farce really to make it appear the government borrowed the money. This was done by the Tories during Covid. 450bn of Q/E v 400+bn of government spend. The two aren’t directly linked but make up balance sheets. And it appears the bonds have been cleared and the government spend matched.

As long as the spend is suited to a real deficit in the economy (Infrastructure/Schools/Hospital/Paying people to stay at home) then the new money ias absorbed and no inflation should occur.

Don’t, rone will be out to say you can print endless money and it will never need paying back or have any negatives….

Amazing. Cheers.

I’ve never said that ever.

I’m describing the system that is in place. Why the insults?

You like all critics in these threads prove you absolutely do not understand government financing.

Once again – there is no limit to £££ our government can produce, it’s just numbers on a spreadsheet that move from BOE/Treasury. But the limit to spending into the real economy is inflation and lack of resources to soak up the money.

It happens every day.

Big companies encompasses more than just energy producers and suppliers. The people who spend the most money are the poorest in society (the rich and seriously rich hoard it) and they aren’t going to have the spare for the odd discretionary purchase.

No, we won’t… but when people get increasing price resistant… shop around more… are looking to eek out every penny… the big retail companies tend to do better out of it than the smaller ones. And Truss keeps talking up cuts in corporation tax for all large companies… not just filling the pockets of the energy companies. Meanwhile… what’s her position on cost of living rises for workers…? You know that. What’s her view on taxes for Amazon vs wages and representation for their employees?

But remember… others will still have lots to spend, just not us. The highest paid are getting record pay increases while everyone else has to suck up ever decreasing real wage levels.

At best it’s irrelevant, and potentially it’s diverting attention away from the place where we should be directing the most scrutiny. It’s interrupting debate because LOOK OVER THERE INSTEAD!

What do you think is going on here? People trying to find the best solution to our problems? Or people vying to make themselves look as good as possible to the electorate?

Truss has been handed an absolute gift with the Queen situation. Political leaders always get a boost in the early stage of a war. In a similar style, Queen dying with see a surge of flag waving. More importantly, headlines will be dominated by Queen for many, many weeks. So little scrutiny or challenge to Government actions.

Don’t, rone will be out to say you can print endless money and it will never need paying back or have any negatives…

That’s nowhere near what he’s saying.

It was her first day at the job, never done anything like that before

I am pretty sure she will have done similar as a minister. Whilst a narrower scope ministers still have to occasionally stand up and be questioned.

Here is a UCL paper explaining the whole financing process – bit complex.

https://www.ucl.ac.uk/bartlett/public-purpose/publications/2022/may/self-financing-state-institutional-analysis

Berkeley, A., Ryan-Collins, J., Tye, R., Voldsgaard, A. and Wilson, N. (2022). The self-financing state: An institutional analysis of government expenditure, revenue collection and debt issuance operations in the United Kingdom.

Summary:

This paper constitutes a first detailed institutional analysis of the UK Government’s expenditure, revenue collection and debt issuance processes. We find, first, that the UK Government creates new money and purchasing power when it undertakes expenditure, rather than spending being financed by taxation from, or debt issuance to, the private sector. The spending process is initiated by the government drawing on a sovereign line of credit from the core legal and accounting structure known as the Consolidated Fund (CF). Under directions from the UK finance ministry, the Bank of England debits the CF’s account at the Bank and credits other accounts at the Bank held by government entities; a practice mandated in law. This creates new public deposits which are used to settle spending by government departments into the economy via the commercial banking sector. Parliament, rather than the Treasury or central bank, is the sole authority under which expenditures from the Consolidated Fund arise. Revenue collection, including taxation, involves the reverse process, crediting the CF’s account at the Bank. With regard to debt issuance, under the current conditions of excess reserve liquidity, the function of debt issuance is best understood as a way of providing safe assets and a reliable source of collateral to the non-bank private sector, insofar as these are not withdrawn by the state via quantitative easing by the Bank of England. The findings support neo-chartalist accounts of the workings of sovereign currency-issuing nations and provide additional institutional detail regarding the apex of the monetary hierarchy in the UK case. The findings also suggest recent debates in the UK around monetary financing and central bank independence need to be reconsidered given the central role of the Consolidated Fund

What do you think is going on here? People trying to find the best solution to our problems? Or people vying to make themselves look as good as possible to the electorate?

By “here” I mean STW, not parliament.

Mcdonnell and Corbyn used fiscal prudence under James Meadway’s budget plans for 2017/2019. It did them no good at all – newspapers just said it was unaffordable.

Yeah they tried to play by the rules and deflect criticism by offering costed solutions. But with help from Blairite MPs who constantly criticised the Tories were able to portray it as unaffordable.

What Corbyn and McDonnell didn’t do, as the current Labour leader and Shadow Chancellor are now doing, is attack the Tories alleged lack of fiscal prudence.

In fact they did the complete opposite and forced Theresa May to, officially at least, announce the end of austerity.

By “here” I mean STW, not parliament.

It’s simple… there’s a very good debate to be had about how the Labour Party is currently led, what they should propose, and how and when they should propose it… but the thread set up to do that became a horrible place to engage, so most people avoid it… and so most new political threads end up people trying to have the same debate in the new thread instead… and once that’s taken over, more casual posters move away from the new thread for the same reason.

What Corbyn and McDonnell didn’t do, as the current Labour leader and Shadow Chancellor are now doing, is attack the Tories alleged lack of fiscal prudence.

Very true. I wish they pushed harder on this.

I mean – their whole projected term budget was less than the Tories spent on Covid in one year proving that the spend is not an issue and vindicating them both.

I am pretty sure she will have done similar as a minister. Whilst a narrower scope ministers still have to occasionally stand up and be questioned.

Obviously she has stood up and answered questions in parliament before. If you think the pressure and responsibility, is the same, and as critical, as being Prime Minister, then that’s up you. She will improve, all Tory and Labour leaders do, that’s because she will gain the experience which she currently doesn’t have.

That’s nowhere near what he’s saying.

Thanks.

Obviously she has stood up and answered questions in parliament before

The discussion was specifically about PMQs and so she had done similar before.
You also miss the subtle fact that Starmer should also improve. He has spent the last few years wasting his time in PMQs since Johnson never answered the question but just threw out some soundbites and insults.
Its going to take some time for him to adjust to actually having questions sort of answered and hence follow up questions being of use.

You also miss the subtle fact that Starmer should also improve.

I don’t think improvement ever stops – the more experience the better the performance. A PM with 10 years experience is likely to be more capable at PMQ than they were with only 5 years experience. Which is why I made a reference to Thatcher’s last PMQ being an exceptionally good one for her.

Are the usual suspects banging on about endlessly printing loads and loads and loads of magic money until we all need wheelbarrows to carry it all about in MMT again?

Jolly good. It’s always both really really interesting and obviously very credible as an economic theory 😃

Every time you hear the line:

“Rising energy bills due to Putin’s war in Ukraine…”

And you will hear it

Repeatedly

Remember this graph

Remember they will say anything to avoid taking responsibility. pic.twitter.com/3mlKbhzaFw

— Marina Purkiss (@MarinaPurkiss) September 8, 2022

Jolly good. It’s always both really really interesting and obviously very credible as an economic theory

Nice one! Anything useful to add?

(P.S it’s an accurate description of monetary operations.)

I love the fact that we were all paid to stay at home (not out of taxes) and there are still stupid comments such as this.

The pound has been in freefall since Brexit (20%+ devaluation against the Euro) and is now at its lowest value against the dollar since 1985 and in response to that you’re advocating Lizzie fires up the printing presses?

No, you’re right… that’d work

What could possibly go wrong? 😂

I love the fact that we were all paid to stay at home (not out of taxes) and there are still stupid comments such as this.

I think you’ll find not all of us were. In particular the person you are responding to funnily enough.

No one paid you to stay at home binners?

No wonder you are so grumpy!