Funding the Future

Government surpluses don’t create rainy day funds

The idea that government surpluses are good because they create piles of cash waiting to be spent in the event of a national emergency is absurd. All money paid in tax is cancelled on receipt by the government. So, all government surpluses actually do is reduce the amount of cash in the private sector economy.

What’s the real reason why we tax?

Most people assume that we tax to fund government spending, but we don’t in economies like that we have in the UK. Instead, we have an economy where the government spends by creating new money and tax then takes it out of circulation, and that creates a need for very different economic management from that we’re being offered.

The big political question is “do you care?”

Left versus right seems like deeply antiquated politics from another era to me. The fight between labour and capital makes no sense when we have to live in a mixed economy. Much more important now is the question “do you care?” because that’s the question that now decides how resources are allocated in our society. Which side are you on?

UK company law’s taken a walk on the wild side

UK company law exists to protect society and honest traders from fraudsters, but since no one has the job of properly enforcing that law it might as well not exist. This failure represents a massive failure on the part of successive governments that needs to be addressed now.

The government can never run out of money

Everyone but the national government of a country can run out of money. They can’t, because they make the stuff. So, in that case why are our politicians obsessed with running out of money when they should instead be obsessed by services that are not good enough and unemployment?

Is £90,000 a year a middle class income?

When being interviewed on the radio I was told by the broadcaster that £90,000 was only ‘middle class income’ and not enough for MPs. She was, very clearly, out of touch with reality.

Don’t believe Wes Streeting

Wes Streeting’s plans for the NHS all have one purpose, and that is to increase the role of the private sector and big pharmaceutical companies within it, at cost to us, the patients. He should not be trusted.

What is the point of the Tories?

For literally hundreds of years the Tories have been one of the two parties that have at all times dominated UK politics. The other might have changed from time to time, but the Tories have been a constant. That, though, can no longer be assumed to the case. Now they might be heading for extinction. Does that matter?

Quantitative tightening? No thank you…

The Bank of England is selling about £100 billion a year of government bonds it bought during the Covid crisis back into City financial markets. There’s no need to. It’s making massive losses doing so. But worst of all, that £100 billion is preventing the government from spending on the investment in the real economy we really need. QT has to stop, now. 

Why the Bank of England needs reform

As far as most people know, the job of the Bank of England is to control inflation, which it has proved itself utterly unable to do. Meanwhile its essential roles in money creation, government funding, and bank and financial services regulation are almost all ignored, when they are really important. We need a Bank of England that concentrates on the jobs it needs to do, not the one it can’t do.